Firsthand Perspectives Exploring the Mental-Financial Health Connection

In the wake of the pandemic, a record number of Americans are struggling with their mental health.¹  Similarly, the financial health of Americans is on the decline, with rising levels of financial vulnerability.² It is no coincidence that people are simultaneously struggling with their finances and their mental well-being: Research has established a link between financial and mental health, with this relationship likely operating bidirectionally.^{3, 4, 5, 6}

With this crisis in play, there is a pressing need to understand the relationship between mental and financial health, as well as strategies that can support overall well-being. To uncover answers, it’s important to learn from those closest to this growing crisis: people who are struggling with their mental and financial health.  

A recent report from the Financial Health Network investigated the mental and financial health connection, finding that finances are a key contributor to the stress that Americans feel. Building upon this initial analysis, this brief features findings from a qualitative study we conducted to further understand the manifestation of this in people’s lives. To move beyond numbers and give voice to these experiences, we recruited nearly two dozen participants who reported experiencing financial stress and poor mental well-being and asked about:

• • How they experience the connection between mental and financial health. 
  • Triggers that cause or exacerbate financial stress and mental health challenges.
  • Coping strategies to simultaneously alleviate financial stress and improve mental well-being.

1. Financial concerns triggered both poor mental well-being and physical challenges. Participants’ responses to financial stress included mental and cognitive impacts such as negativity, irritability, and difficulty concentrating. They also noted behavioral impacts, including social withdrawal and isolation, as well as physical symptoms such as back pain and stomachaches.

2. Poor mental well-being was associated with negative financial impacts, creating a vicious cycle. Participants detailed not only how financial stress affected their mental well-being, but also how mental health challenges negatively affected their finances.

3. For many, simply meeting day-to-day needs caused stress. Having to manage specific pressures, including affording food or housing, paying bills, having debt, and managing rising prices and inflation, triggered stress and poor mental well-being among participants.

4. Financial shocks triggered increased stress and poor mental well-being. In particular, participants noted unexpected home or car repairs and medical expenses.

5. Participants reported that holding debt put stress both on their finances and mental health. Outstanding debt contributed to symptoms like anxiety and depression.

6. Participants found both financial and non-financial strategies to be helpful in managing stress. Activities like assessing budget allocations, paying off small bills first, and focusing on short- and longer-term financial goals helped them alleviate and/or cope with financial stress and improved mental well-being. Exercising and mindfulness also had a positive effect.

In addition, study participants identified ways they wanted their employer to help them alleviate their financial stress and improve their mental health. Most of these strategies involved offsetting expenses that triggered stress through increasing wages, providing childcare subsidies, or offering tuition and loan assistance. Certain benefits, such as Employee Assistance Programs and paid time off, were also mentioned. Participants noted how increased wages would help with the cost of day-to-day expenses. 

Regardless of how help was delivered, participants identified a need for a set of solutions and strategies that enable people to better care for their mental and financial health. Going beyond the numbers, this study lifts up the voices of those experiencing financial and mental health struggles. We hope this report lends insight into the depth of these experiences and begins to shed light on approaches that might foster greater well-being.  

The findings of this report are based on data, collected in November 2023, from 22 participants who were experiencing both 1) frequent financial stress and 2) low mental well-being. Data were collected through a moderated online discussion board, a qualitative research method that allows participants to share their experiences in a more detailed and collaborative manner than a survey. This research approach is not intended to be representative of all people living in the United States who experience financial and mental health challenges, and it does not enable us to quantify the prevalence of experiences. Rather, this study provides a glimpse into the lived experiences of people managing financial health and mental well-being challenges. For additional details, see the Methodology.

Participants in our study noted experiencing mental and physical effects from financial stress. They reported that worrying about their finances often led to poor mental well-being, including feeling irritable or negative, having difficulty concentrating, and struggling to sleep. Participants also mentioned that their financial stress impacted their behavior, and several said that it led them to withdraw from work or social activities. 

Impacts were not limited to mental health symptoms. Financial stress also impacted physical health, with participants sharing that their anxiety about finances caused symptoms like back pain and stomachaches when they felt particularly stressed.

Disclaimer: The people shown in these images are not study participants.

The relationship between financial health and mental well-being also flowed in the other direction. Participants detailed not only how stress about their finances impacted their mental well-being, but also how mental health challenges negatively affected their finances. 

Consistent with previous research that indicates poor mental health can impact people’s income by affecting productivity, motivation, and concentration, participants in the study reported that their mental well-being negatively impacted their income.⁷ Nearly half said that they had called in sick to work because of their mental health, and many reported a lack of motivation at work due to their mental health symptoms. 

Participants reported varying impacts on their spending and saving habits. Some reported that one of their responses to depression and anxiety was impulsive spending, which sometimes resulted in overspending. Others pulled back on spending as they withdrew from social and work activities. While this could potentially be a positive financial behavior, it could also bring social and emotional consequences. 

Finally, some participants reported that their mental health challenges got in the way of being able to save, a finding that echoes earlier research.⁸ Poor mental health caused them to be distracted, leading to missed or delayed payments. Indeed, participants said that while they were experiencing poor mental health, prioritizing their finances – in particular, saving and long-term financial planning – was particularly difficult. This can have significant ramifications for longer-term financial stability.⁹

Disclaimer: The people shown in these images are not study participants.

When asked about causes of financial stress, nearly every participant indicated that basic costs of living were a concern. People also pointed to specific pressures like affording food or housing, paying bills, having debt, and dealing with rising prices and inflation. Participants described managing these costs – and making tradeoffs – as stressful. People also shared that worrying about these expenses heightened their anxiety and, in some cases, could trigger experiencing depression.

Individuals struggling to make ends meet might reach out to others for financial support, but this too could cause stress or trigger poor mental well-being. For example, several participants reported that borrowing from friends and family, seeking a loan, or receiving public benefits caused stress or resulted in feelings of shame and frustration. Cumbersome application processes, especially for public benefits, were particularly stressful. Concern about meeting near-term financial obligations also led to feelings of stress for people considering their long-term well-being.

Disclaimer: The people shown in these images are not study participants.

Unexpected expenses exacerbated already strained budgets. Participants frequently mentioned that unplanned home or car repairs and medical expenses triggered financial stress and affected their mental well-being. 

Consistent with existing research, our study also found healthcare to be one specific category of expenses that impacted participants’ financial stress and mental well-being.^{10, 11, 12} Medical expenses – specifically, medical debt incurred in response to unexpected expenses – appear to be particularly disruptive. Those who have medical debt are more likely to forgo seeking further care, skip bills, and delay life milestones, such as college and homeownership.¹³ People carrying medical debt are also three times more likely to experience mental illnesses such as anxiety and depression, in addition to experiencing more stress.¹⁴

Participants described a number of healthcare-related costs, such as insurance copayments and out-of-pocket expenses for their own or other household members’ physical and mental ailments, that led to financial issues. Further, these were often highly emotional expenses, intimately wrapped up in the implications of poor or declining health in the household. These financial challenges seemed to be particularly impactful on mental well-being.

Disclaimer: The people shown in these images are not study participants.

Participants frequently referenced debt as a financial stressor, and reported that their outstanding debt contributed to symptoms like anxiety and depression. This echoes extensive research on the impact of debt on mental well-being.^{15, 16}  Various sources of debt are associated with decreased mental and physical health, including medical debt, credit card debt, student loans, and payday loans.¹⁷ Some participants in our study told us that taking on debt was associated with feelings of shame and embarrassment. People often talked about the anxiety associated with carrying debt, saying that they constantly think about it, lose sleep over it, or feel that it prevents them from moving forward financially and emotionally.

Disclaimer: The people shown in these images are not study participants.

Participants leveraged a number of strategies to manage their stress. On the financial management side, participants reported that activities like assessing budget allocations, paying off small bills first, and focusing on financial goals helped them feel better about their situation.

Participants also reported that non-financial strategies, like exercise and mindfulness, helped alleviate stress and improved mental well-being. Participants noted that these practices helped them stay calm, manage anxiety, and think more clearly. When their emotional selves were more regulated through these strategies, they were better able to address some of the experiences and triggers of their financial stress.

Disclaimer: The people shown in these images are not study participants.

Participants were also interested in accessing professional help to address their financial stress and mental well-being. Several participants reported that they currently or previously saw a mental health professional, often a therapist. Many others were interested in accessing this care. 

Additionally, several participants were interested in working with a financial advisor. However, participants perceived cost and availability to be barriers in accessing both financial and mental health professionals. While not always the case, many advisors require customers to have a certain level of assets, and costs can range based on fee structures, with flat fees starting at $2,000 a year to hourly rates starting at $200 per hour.¹⁸ This finding is also well-supported in research, which has identified and documented the prohibitive costs of mental health access and shortage of behavioral health providers, especially those who are within private and public insurance networks.¹⁹

Participants also identified ways they wanted their employer to take action, bolstering research that workers value employer support for financial and mental health.^{20, 21}  Overwhelmingly, participants highlighted the need for livable wages to alleviate the financial strain they feel to make ends meet. 

Participants also underscored the importance of benefits, particularly those that could offset some of the expenses that trigger stress, such as childcare subsidies or tuition or loan assistance. Participants were also interested in better mental health benefits for therapy and crisis management, like an Employee Assistance Program (EAP), and several mentioned interest in access to financial guidance via their employer.²² Finally, participants mentioned the need for workplaces that recognize the strain that employees feel, and provide sufficient leave and paid time off. 

Financial stress and mental well-being are intimately related and highly influence each other. This study sought real-world individual experiences to help reveal the relationship between financial and mental health. Participants’ testimonials highlight the need for a set of solutions and strategies that empower people to care for their mental and financial health.

This study also raises the need for further inquiry about the mental-financial health connection, including the following areas:

• • Prevalence of connected financial and mental health challenges: Though this study was able to shed light on common experiences of people dealing with financial and mental health challenges, it does not establish the prevalence of these experiences. Further research is needed to understand the ubiquity of these mental and financial health challenges, variance across groups, and particular risk factors.
  • Strategies and solutions that address the mental-financial health connection: Which strategies and solutions are most effective, and what are the barriers to implementation? A deeper understanding of how people can better address financial stressors while managing cycles of anxiety, depression, or other mental health challenges is critical to ensuring more people can be more mentally and financially healthy.
  • Further exploration into a holistic approach: It is becoming clear that there is a strong connection between one’s mental and financial health. Further exploration into a holistic approach – one that is inclusive of one’s mental health as well as financial health – may be a new promising model for mental healthcare and financial health improvement moving forward. 

By uplifting the voices of those struggling with their financial and mental health, we hope this study provides helpful perspective and equips employers and other stakeholders to take action to improve the well-being of people across America.

The findings of this report are based on data collected through a moderated online discussion board, a qualitative research method that allows participants to share their experiences in a more detailed and collaborative manner than a survey. The topic of mental and financial health is particularly well suited to a discussion board since unlike other traditional qualitative methods, such as focus groups, discussion boards allow for a level of anonymity that can be advantageous in generating discussion about sensitive subjects. Further, the discussion board captures a breadth of experiences from a diverse set of participants in their own words and language. 

Because we sought information about the financial and mental health connection, we recruited participants who reported both 1) frequent financial stress and 2) generally low mental well-being. Participants were recruited through a national online panel, and their eligibility for the study was confirmed directly via phone. Twenty-two people participated in the online discussion board (92% cooperation rate). Quotes from participants are included throughout this report and have been lightly edited for clarity. 

Table 1. Study participants frequently experienced financial stress and low mental well-being.
Financial stress and mental health experiences of discussion board participants.

Note: Potential participants reported their frequency of financial stress along the following scale: “Always,” “Often,” “Sometimes,” “Rarely,” or “Never.” Those who indicated experiencing financial stress less frequently than “Often” were not included in the study. Similarly, respondents were asked to indicate their overall mental well-being, with options including “Excellent,” “Very good,” “Good,” “Fair,” and “Poor.” Individuals who reported mental well-being other than “Fair” or “Poor” were not included. Finally, individuals who indicated “Fair” or “Poor” mental well-being were asked: “When thinking about how frequently you feel your mental well-being is fair/poor, is it…” with answer options including “Just a recent occurrence,” “It comes and goes,” or “Nearly all the time.” Those who indicated it was just a recent occurrence were not included. 

Note that participants were not asked to disclose whether they had a clinically diagnosed mental health disorder. Instead, we were concerned with participants’ self-assessment of their mental well-being generally. Fifteen reported that they felt nervous or anxious for more than half the days in the last six months, with five reporting feeling nervous or anxious nearly every day. The vast majority reported feeling sad, depressed, or unmotivated for more than half the days or nearly every day. Some participants also reported they were unable to stop worrying.

The discussion board was conducted from November 15 to November 16, 2023, during which time participants asynchronously responded to questions released twice daily. Given the sensitivity of the research topic, 75% of questions were kept private to moderators and researchers, while the other responses were visible to all participants so the group could react to and converse with fellow panelists. At the close of each session, we provided information about national mental health resources. Participants received $110 for participating in the discussion.

Our study included participants across various genders, races, incomes, employment status, and financial roles in households; Table 2 provides participant demographics. Participants in our sample skewed younger, with an average age of 42, and had lower incomes, with about two-thirds of participants earning less than than the median household income. This is consistent with our previous research about who is more likely to experience financial stress and low mental well-being.^{23, 24, 25}

This research approach is not intended to be representative of all people living in the United States who experience financial health and mental health challenges, and it does not enable us to quantify the prevalence of experiences. Rather, this study provides a glimpse into the lived experiences of people managing financial health and mental well-being challenges.

Table 2. Study participants had diverse identities and backgrounds.
Demographics of discussion board participants.