Exploring the Interconnectedness of Financial and Mental Health

The link between financial and mental well-being has become increasingly evident in today’s world. Our 2023 report, “Understanding the Mental-Financial Health Connection,” found that people who were Financially Vulnerable more frequently reported they were stressed about their finances, and more often reported that their mental health was poor or fair when compared to people who were Financially Healthy. Our recent research, “Firsthand Perspectives Exploring the Mental-Financial Health Connection,” goes deeper into the ties between mental and financial health, sharing findings from a qualitative study of nearly two dozen people who report experiencing financial stress and poor mental well-being, identifying challenges and ways to help. 

Recently, I had the privilege of attending a thought-provoking Executive Roundtable discussion on the mental-financial health connection with several Financial Health Network Members, including Bread Financial, GreenPath, and OneMain Financial, along with my colleagues, Andrew Warren and Riya Patil. Here are some of the key highlights of the discussion. 

Research on the connection between financial and mental well-being shows:

• • For many, simply meeting day-to-day needs causes stress.
  • Dealing with shocks and unexpected expenses often triggers financial stress and poor mental well-being.
  • Finances are a top concern – lower-income households report elevated levels of financial stress.

The complex relationship between financial health and stress and the taboo nature of discussing financial struggles often coincides with physical symptoms and exacerbates mental health issues. People with medical debt are three times as likely to have mental health impacts like anxiety, depression, or stress. Shocking statistics from recent surveys underscored the widespread impact of financial stress, with a large portion of respondents reporting its adverse effects on their mental well-being.

As the conversation unfolded, it became clear that addressing financial stress requires a multifaceted approach. From employer-led initiatives to collaborative partnerships and advocacy efforts, each speaker emphasized the need for proactive measures, including the importance of providing tailored resources and support. They acknowledged that one size does not fit all when addressing financial and mental health concerns.

In our recent conversation, I learned that taking a holistic approach through benefits for employees regarding financial confidence and emotional well-being can provide employees with resources that address financial concerns and help them prioritize their mental health. The discussion emphasized that recognizing the various types of stress workers face, with financial worries often topping the list, is crucial.

Roundtable participants also emphasized that forging strong financial health partnerships, between employers and mental health providers, for example, empowers organizations to tackle financial stress head-on. These collaborations encourage organizations to extend their reach and enable individuals to access support before financial challenges spiral out of control.