For employees of all income levels, mental health and financial wellbeing are deeply interconnected. Financial problems can cause significant stress, anxiety, and depression, which can in turn lead to a range of mental health issues. Mental health issues can, in turn, lead to financial problems. This creates a vicious cycle that can be difficult for employees to break.
Research has consistently shown a strong link between financial stress and mental health issues.
Mental health and financial wellbeing findings from the experts
According to a survey conducted by the National Endowment for Financial Education, 9 out of 10 Americans say that financial stress impacts their mental health, with nearly 1 out of 2 respondents saying that financial stress has caused them to experience anxiety or depression.
According to a recent survey conducted by the American Psychological Association, 67% of Americans reported feeling stressed about money at least some of the time, and 71% reported feeling stressed about money at least once during the previous year.
How financial problems impact mental health
There are several ways in which financial problems can impact mental health. One of the main ways is through increased stress and anxiety. Financial problems can cause individuals to worry about how they will pay bills, provide for their families, and save for the future. This stress can lead to anxiety, sleep disturbances, and other mental health issues.
Financial problems can also impact self-esteem and feelings of self-worth. When individuals are struggling financially, they may feel ashamed or embarrassed, which can impact their mental health. This can be especially true for individuals who have experienced financial setbacks, such as job loss or bankruptcy.
In addition to the impact on individuals, financial stress can also have significant costs for employers. According to a study by the American Psychological Association, financial stress costs U.S. employers an estimated $500 billion per year in lost productivity, absenteeism, and healthcare costs.
Examples of the connection between mental health and financial wellbeing
Real-life examples illustrate the impact that financial stress can have on individuals and their mental health.
For example, consider the case of Franco, a middle-aged worker who has been struggling to pay his bills for several months despite earning a six-figure salary. Franco has allowed his lifestyle to become difficult to maintain. He is constantly worried about how he will pay for his rent, utilities, car payment and luxury expenses. He has begun to experience feelings of hopelessness and despair. He is unable to focus at work and is often absent due to his mental health struggles.
Another example is the case of Kaia, an entry-level employee who recently graduated from college with a significant amount of student loan debt. Kaia has been working multiple jobs to try to make ends meet, but she is still struggling to pay her bills. She is constantly worried about her financial situation and has begun to experience symptoms of anxiety and depression.
How employers can take action
To address the link between mental health and financial wellbeing, employers can take several steps to support their employees. One of the most effective ways is to provide a holistic financial wellbeing benefit that offers financial education and resources to help employees manage their money and reduce financial stress. This can include workshops on budgeting and saving, access to financial advisors or counselors, and online resources that provide information on personal finance.
In addition, employers can provide flexible, tax-advantaged benefits that help employees better manage their healthcare and related expenses. This can reduce financial stress and anxiety, which can in turn reduce the likelihood of employees experiencing mental health issues related to financial stress, such as anxiety and depression.
Overall, the link between mental health and financial wellbeing is clear. Financial problems can cause significant stress and anxiety, which can lead to a range of mental health issues. By addressing financial stress and supporting employees' financial wellbeing, employers can reduce the likelihood of mental health issues among their employees, which can lead to improved productivity, reduced healthcare costs, and better overall outcomes for individuals and organizations.