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How financial wellbeing impacts mental health

Paul Firth is the Managing Director of ICAS MENA, the region’s largest workplace mental health and wellbeing provider, and a supporting partner of the Ghaya Programme. He tells us how poor money management affects mental wellbeing and how financial education can help.

Several studies indicate a strong correlation between financial wellbeing and mental health.

According to the Money and Mental Health Policy Institute, poor finances often lead to stress and anxiety, which have a negative impact on finances.

In its study, the institute found that:

  • 46% of people with debt also have mental health issues
  • 86% of people with mental health issues and debt say that their debt worsens their conditions
  • Compared to people without debt, those with depression and debt are 4.2 times more likely to still be in debt after 18 months
  • Those with debt are three times more likely to contemplate suicide as a result of those debts

People who are under financial stress are more likely to report poor overall health, including:

  • Anxiety and depression
  • Compromised immune systems
  • Weight gain or loss
  • Insomnia and trouble sleeping
  • Ailments such as headaches, digestive problems. diabetes, high blood pressure muscle tension, and heart disease

Stress and anxiety over money can also lead to relationship problems, social withdrawal and an alcohol and drug abuse.

Money and health problems – a vicious cycle

Taking into consideration all of the data, we find that a poor financial and mental health situation creates a seemingly endless cycle of distress. Stress caused by debt or other financial issues can leave individuals feeling depressed or anxious.

A decline in mental health makes it more difficult to manage money. People may find it more difficult to concentrate or lack the energy to deal with their bills. They may lose income by taking time off due to anxiety or depression, which leads to more money worries.

People become trapped in a downward spiral of increasing money problems and declining mental health.

Impact of poor financial wellbeing on work

The PWC Employee Financial Wellness suggests that a financially stressed individual will likely postpone retirement and extend working years. Looking at causes of workplace stress, they found that financial stress is the most common with 59% of workers saying they suffered from financial stress.

An employee’s financial stress can have a devastating impact on a business. If someone is preoccupied with money worries, that might affect:

  • The quality of their work
  • Their relationships with colleagues
  • Their attitude to health and safety
  • Their commitment to staying at the company

The result is higher business costs.

Promoting financial wellbeing

To address these problems in Abu Dhabi, the Authority of Social Contribution Ma’an has partnered with Abu Dhabi Global Market Academy (ADGMA) and The London Institute of Banking & Finance (LIBF) to develop the Ghaya programme. This has the support of the Abu Dhabi Social Support Authority who validate the content, the Emirates Accountants and Auditors Association, and the support of the Department of Community Development who operate the programme.

At ICAS MENA we’re proud to be a supporting partner of the Ghaya Financial Literacy Programme, with a financial clinic of financial advisors. Additionally, we have several programmes to assist companies in supporting their employees’ mental health and financial management, such as coaching and counselling.

At present, one in every three people worldwide will suffer from a mental health issue during their lifetime. That’s a worrying statistic – especially when depression is one the way to becoming the most global common health condition by 2030.

By teaching people how to manage their money, we can help them deal with one of the leading sources of stress. Thus, they can avoid becoming entangled in a vicious cycle of financial difficulties and mental health issues.