“It sounds like they have mental health challenges.”
A client of ours made this remark spontaneously as we described the values of one of the segments in our Financial Fitness Index, prompting Environics Research to embark on a years-long investigation into the link between mental health and financial well-being. On World Mental Health Day, just how strong is the link between mental health and financial empowerment? According to more than a decade of tracking, the link is strong indeed.
Our exploration of this topic began years ago, as I was presenting the annual Financial Fitness Index results to the study sponsors at Sagen and the Canadian Association for Financial Empowerment (CAFE-ACAF.org). After showing the demographic and Social Values profiles of the first four segments, we reached the fifth and final group: the Alert segment, the Canadians who struggle most.
Then, as now, their defining demographics showed they tended to be somewhat younger than average and had lower educational attainment and incomes. They were also less likely to have full-time paid work – for example, to be unemployed, employed part-time, or at home full-time, possibly doing unpaid care work . Members of the Alert segment were also twice as likely to be renting (not owning) their homes. And then, as now, they were more likely to be women than men. (It’s important to note that these characteristics are all tendencies. People in middle- and even high-income segments can certainly fall into money management challenges, and the groups that are overrepresented in the Alert segment (youth, women, Canadians with less education) are also present in other, more financially secure segments).
The defining Social Values of Alert included high scores on Financial Concern for the future (not surprisingly), Technological Anxiety, and Aversion To Complexity, as well as low scores for Saving On Principle. These values made intuitive sense for a segment who reported that they worried about making ends meet from month to month, that their financial situation in the past year had gotten worse, and that they were pessimistic that things would improve in the coming year.
But when our client suggested that this group might be struggling with mental health challenges, it was the non-financial values that they were responding to. Members of the Alert segment score very high on Anomie and Aimlessness (feeling detached from meaning, purpose, and others in society), Fatalism, and Time Stress. They also score low on Adaptability To Complexity, Personal Control, Vitality, and Effort For Health.
We decided to learn more. I reached out to my colleague Vijay Wadhawan in the Environics Research Health & Wellness Practice, whose research focuses in part on how Canadians’ understand their own health. Vijay explored the PatientConnect segmentation, seeking groups that shared characteristics with the Alert segment in the Financial Fitness Index. Analysis revealed that the Anxious Avoiders had much in common with Alert members – and the Anxious Avoiders were well known in his research to struggle with mental health challenges.
The similarities between the Alert and the Anxious Avoiders confirmed that our client’s hunch had something to it. To explore further, we added a battery of mental health questions to the next Financial Fitness Index survey, asking how frequently people found themselves experiencing a variety of mental health challenges, such as worrying too much about things or feeling afraid, as if something awful might happen. While most Canadians said they did not feel any of the measured conditions on a daily/regular basis, fully 60% of those in the Alert segment reported at least one of the conditions. Only 14% of Alert members said they experienced none of the conditions we measured. In the most Financially Fit segment, by contrast, half said they experienced no such concerns.
What are the Alert segment most stressed about? Naturally, 85% report stress about money, but many report feeling anxious about their personal health (49%) and even their personal safety (19%).
Very clearly, there is a strong relationship between mental health and financial well-being. Exploring causation will require much deeper research, but it is likely they are highly interrelated. Saying one causes the other – that financial stress harms mental health, or that mental health challenges give rise to financial struggles – is likely an oversimplification.
The official theme for World Mental Health Day 2024 is, “It is Time to Prioritize Mental Health in the Workplace.” Those working with people with mental health struggles need to be aware they are likely dealing with very serious financial hardships; those working with people struggling financially need to be aware that mental health challenges are likely present as well. Our other research on this topic shows that financial counsellors’ first challenge will be earning clients’ trust and overcoming their fear of being judged by those seeking to help them. Building rapport and understanding is an essential first step to providing effective support.
