May is Mental Health Awareness Month, a time to pause and reflect on the many factors that shape our well-being. We all know there’s a significant connection between stress and mental health, but the relationship between financial stress and health, particularly for vulnerable populations, is too often overlooked.
Imagine working full time, sometimes juggling multiple jobs, yet still struggling to pay rent, keep food on the table, or cover an unexpected medical bill. This is a reality for Asset Limited, Income Constrained, Employed (ALICE) households — hardworking individuals and families who earn too much to qualify for government assistance but too little to achieve financial security. They walk a financial tightrope every day, knowing that one emergency could send them into a crisis.
This constant worry about money takes a serious toll, not just on bank accounts but on mental wellness. Chronic financial stress in families and individual earners can lead to anxiety, depression, and even physical health problems. In fact, at least one study has found a link between debt and suicide due to financial stress.
All of this means that for ALICE households, financial stress isn’t just a quiet backdrop in people’s lives; it’s a relentless daily struggle that can have serious long-term health consequences.
Factors Contributing to Financial Stress in ALICE Households
Several factors contribute to the heightened financial stress experienced by ALICE households:
- Income instability. Many ALICE individuals work in jobs with inconsistent hours and wages, leading to unpredictable income that makes budgeting and financial planning challenging.
- High cost of living. Rising costs of housing, health care, and education often outpace wage growth, making it difficult for ALICE households to keep up with expenses.
- Lack of savings. Limited or no savings mean that unexpected expenses, such as medical emergencies or car repairs, can quickly become financial crises.
- Debt. To cope with financial shortfalls, many turn to credit, leading to debt that can be overwhelming and contribute to ongoing stress.
Psychological Impact of Financial Stress
Research indicates that individuals experiencing financial difficulties are more likely to suffer from significant mental health problems, including depression and anxiety. This adverse relationship is particularly pronounced in ALICE households, where the constant challenge to make ends meet exacerbates psychological distress.
The continuous financial strain experienced by ALICE households can lead to various mental health issues:
- Depression and anxiety. Persistent worry about finances can result in feelings of hopelessness and anxiety. Research also shows a consistent pattern of depression from financial stress among adults.
- Reduced cognitive function. Financial stress can impair decision-making abilities, leading to difficulties in focusing and problem-solving.
- Social isolation. Financial constraints may limit social interactions, as individuals might avoid gatherings that require spending or that involve conversations about careers and lifestyles, leading to feelings of isolation.
- Physical health decline. Chronic stress is linked to various health issues, including hypertension and weakened immune function, further exacerbating mental health problems.
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Breaking the Cycle: Financial Stress and Mental Health
The relationship between financial stress and mental health is bidirectional; not only can financial stress lead to mental health issues, but existing mental health problems can also impair financial decision-making, creating a vicious cycle. For example, individuals with depression may struggle with motivation, making it challenging to manage finances effectively, which can lead to further financial difficulties.
Strategies to Mitigate Financial Stress
ALICE households who struggle with major economic worries can take the following steps to improve their finances and mental health:
- Seek out financial education and counseling. Many free online resources can help you develop budgeting skills, understand credit management, and plan for emergencies. Financial education and resources may also be available through a local credit union or community-based social services nonprofit near you.
- Get free assistance with your taxes. Tax season can heighten stress levels for many Americans, but you don’t have to go it alone. Seek out online resources and nonprofits such as United Way of York County to get tax assistance.
- Use a one-stop hotline. You can get help with both your finances and your mental health by calling a free, confidential health and human services hotline such as PA 211 provided by United Way. The national version of this hotline (211) can be used in all 50 states, the District of Columbia, and Puerto Rico. It connects users to essential services that help ALICE households move toward financial security and a better overall quality of life.
During Mental Health Awareness Month, it's crucial to recognize the profound impact financial stress has on the mental health of ALICE households. By understanding the challenges they face and implementing supportive measures at individual, organizational, and policy levels, we can work toward alleviating financial stress and promoting mental well-being for all. You can help ALICE households today by supporting your local branch of United Way.
Conquer Your Financial Stress With United Way of York County
United Way of York County in Pennsylvania assists hardworking households on their journey toward financial stability. To meet the needs of the ALICE population, we are embarking on an issue-focused strategy to create a transformational impact for workers. We are focusing on two key barriers: childcare and transportation.
We offer many other resources through PA 211, a free, confidential health and human services information and referral hotline. Learn how to use PA 211 to access resources such as food, clothing, financial help, and mental health assistance. Contact us today to get the services you need for a financially successful future!
With one donation, you can help your ALICE neighbors and friends. Gifts to the United Way of York County Impact Fund are dollars that stay in York County and impact lives where you live and work. Please consider giving today!