Financial Strain and Health

In the United States, financial stress significantly impacts overall well-being. A staggering 40% of Americans report experiencing high stress related to money, while 76% of American households live paycheck to paycheck. Financial and mental well-being are inextricably linked, with financial strain fueling mental distress, and mental health struggles exacerbating financial challenges.

The Financial Health Network conducted a study on mental and financial well-being, analyzing data from a nationally representative sample of U.S. adults between April and June 2023, focusing on various aspects of their financial health.

The findings reveal that individuals classified as “financially healthy” consistently report significantly higher rates of “excellent” or “very good” mental well-being compared to those categorized as “financially coping” or “vulnerable.” The figure below illustrates self-reported mental well-being across a gradient, ranging from poor to excellent financial health. A quarter of respondents report fair or poor financial health. Approximately half of respondents reported fair or poor financial coping and financial vulnerability.

The researchers note that women, younger individuals, and minorities are disproportionately affected by financial vulnerability, which severely impacts their mental well-being. Furthermore, the correlation between poor mental health and debt intensifies when the debt feels beyond an individual’s control, as is often the case with medical or student debt. Medical debt, in particular, is closely linked to mental health problems.

Strategies for money management skills, whatever one’s income, may improve not only economic outcomes, but also mental health outcomes for struggling Americans. Mental health professionals may find themselves discussing patient finances when stress and anxiety are the reasons for seeking care.