A recent report from Telus Health highlights a profound connection between workers’ financial concerns and their mental health. The study suggests that addressing financial well-being is a crucial aspect of mental health support.
Paula Allen, Global Leader of Research and Client Insights at Telus Health, emphasized the importance of considering financial well-being as part of any comprehensive mental health strategy. The company uses indexes to measure both financial well-being and mental health.
Telus Health’s latest findings for September indicate a decline in financial well-being scores, dropping from 66.7 in February to 65.9 in September, the lowest since the index’s launch in January 2021. Simultaneously, the mental health score fell to 69.7 in September, marking a 1.4-point decrease from August.
Allen highlighted the predictive relationship between financial well-being and mental health. The study found that increased financial stress is a common concern, with 74% of Americans reporting financial stress, according to a recent CNBC Your Money Survey.
Moreover, academic research has underlined the link between mental health and retirement savings. People experiencing anxiety and depression are nearly 25% less likely to have retirement savings accounts, according to a 2017 study conducted by experts from Cornell University and Medica Research Institute. Furthermore, individuals with psychological distress tend to have retirement savings up to 67% lower as a share of their overall financial assets compared to those without such symptoms.
While it’s challenging to pinpoint whether mental health conditions lead to poorer financial outcomes or vice versa, the study underscores the strong connection between financial preparedness and mental health. Workers with higher financial well-being and mental health scores tend to have a better understanding of their retirement savings needs and are more prepared to maintain their desired standard of living in retirement.
Conversely, those with lower mental health and financial well-being scores often lack clarity about their retirement needs and are more concerned about their ability to retire. The presence of emergency savings also significantly impacts mental health, with the absence of an emergency fund contributing to higher levels of anxiety and vulnerability, irrespective of income.
Experts suggest that employees can take steps to improve their financial and mental health, such as reducing high-interest credit card debt and building emergency savings. Understanding the benefits available from employers, including those related to financial and mental health, can be beneficial. Additionally, developing a strong emotional connection to financial goals, such as retirement or building emergency savings, can motivate individuals to take action and overcome their natural inclination toward short-term thinking.
This study underscores the importance of addressing financial well-being as a vital aspect of promoting mental health and overall wellness among workers.
