228 National Financial Literacy Month - Day 21 - The Impact Your Finances Have On Your Mental Health

Learn about Paul Lawrence Vann's digital Financial Fitness course, it is being offered at a 50% discount throughout the month of April, National Financial Literacy Month, here is the link:  https://bit.ly/3dbperG

Make no mistake about it, money problems and mental health issues are intrinsically linked. Research from the 2008 great recession and COVID-19 reflect the link between finances and mental health.

According to the Money and Mental Health Policy Institute¹, poor finances often lead to stress and anxiety that can further impact finances.

Facts: 

• 46 percent of people with debt also have a mental health diagnosis
• 86 percent of people with mental health issues and debt say that their debt makes their mental health issues worse
• People with depression and debt are 4.2 more likely to still have debt at 18-months compared to their counterparts without debt
• Those with debt are three times more likely to contemplate suicide due to that debt

The Cycle:

1. Mental health problems make it harder to earn, manage money and spending, and to ask for help.
2. Financial difficulty
3. Financial difficulty causes stress and anxiety, made worst by collections activity or going without essentials
4. Mental health  problems
5. This cycle repeats itself over and over again

Americans suffer from financial stress. A Harris Poll conducted in the early months of the COVID-19 pandemic showed that 90 percent of Americans felt financial stress.  Note that financial stress is not limited to hard economic times, such as the fallout from a pandemic.

a Northwestern Mutual study found that 44 percent of Americans stated that financial concerns were their number one stressor, with more than one in four feeling depressed about finances at least monthly and two out of ten feeling depressed weekly, daily, or hourly.

Continuous financial stress wreaks havoc with mental health. On the Mayo Clinic’s website5, the list of mental health issues due to stress includes:

• Anxiety
• Depression
• Fatigue
• Sleeplessness

The American Psychological Association (APA)6 found that stress can lead to unhealthy habits, including excessive drinking and drug use.

Continuous financial stress wreaks havoc with mental health. On the Mayo Clinic’s website5, the list of mental health issues due to stress includes:

• Anxiety
• Depression
• Fatigue
• Sleeplessness

The American Psychological Association (APA)6 found that stress can lead to unhealthy habits, including excessive drinking and drug use.

Financial stress can impact employers too. That is because financial stress manifests itself in a variety of ways in the workplace, such as7:

• Daily tasks going unfinished
• Lower quality work
• Poorer relationships with co-workers
• Indications that an employee is seeking other employment

When this happens, employers suffer increased costs from absenteeism, presenteeism, high turnover, high healthcare costs, more on-the-job accidents, less participation in 401(k) benefits, and more.

According to Salary Finance8, these issues related to financial stress cost businesses about $3,000 per employee per year. 

With a financial wellness program created specifically for your employees and their individualized needs, employers can help lessen employee financial stress and improve mental health by providing ways to learn important financial management skills and behaviors.