The clear connection between financial and physical health raises the ante for employers and governments to support financial education

By Joe Saari

Founder and Board Member

Financial Fitness Group

The state of your finances influences your physical health. The concept may not seem obvious, but there is evidence to support the correlation. This connection between financial well-being and overall health underscores the importance of effectively managing your money.

Health and finances: an intertwined relationship

Multiple studies have illustrated the correlation between an individual’s financial wellness and their physical and mental health. Through its own surveys and an analysis of the research, the Money and Mental Health Policy Institute demonstrated that financial wellness and physical and mental health problems often feed off each other.1 A vicious cycle can be set off as financial problems cause people to experience fears and anxiety that only further hinder their ability to manage their money effectively.

The studies illustrating the close link between people’s financial circumstances and their health have shown that:

  • 46 percent of people with debt also have a mental health diagnosis.2
  • 86 percent of people with mental health issues and debt said their financial situation made their mental health problems worse.3
  • Financial challenges inhibit recovery, as evidenced by the fact that people with depression and debt are 4.2 times more likely to still be depressed 18 months later, as opposed to people who were experiencing depression without any accompanying financial hardships.4

The workplace spillover

Especially as inflation has surged this year, Americans continue to struggle under financial strain. A recent study from the Lending Club Corporation found that 61 percent of Americans – some 203 million people – are living paycheck to paycheck. That’s up from 55 percent just a year ago. With expenses that often exceed their limited incomes, many people are in a constant state of economic uncertainty. Every aspect of their lives is impacted by their worries about money – their home lives, their relationships with family members and friends, and their ability to perform on the job.

Employers are understandably recognizing the importance of providing financial education to their workforces. Employees and their organizations have much to gain from the availability of training and educational resources on the topic. Empowering staff to become financially savvy makes them healthier and happier while also strengthening an organization’s culture and enabling people to be more productive. When employees are not distracted by their financial struggles, their performance improves.

The solution benefits everyone

The path to developing good financial habits follows the same route toward improved physical health. The first step is education. When individuals understand the value of exercise and good eating habits, they are more inclined to incorporate it into their lives. Similarly, understanding the benefits of managing debt, living within their means, and saving as much as possible is the first step toward action.

But how to begin? Even the simplest training tools, like a one-page infographic on how to manage credit cards or an animated video that explains the various types of stocks, can work with other educational resources to make a large collective impact. Employers also play a critical role by making educational resources easily accessible and consumable in formats that are respectful of time constraints and the preferences for how we consume information.

Governments can also assist by providing educational resources while continuing to offer and strengthen the tax-favored vehicles that incentivize saving for retirement and children’s education.

Everyone benefits when more of us understand how to effectively manage finances. As the studies show, individuals are able to lead healthier and happier lives. Employers benefit because people can achieve more in their careers when they are free from distracting financial worries. Society benefits because more people can reach and maintain financial independence without needing assistance for the financial and physical health burdens that money problems create.

Collectively, we have so much to gain from better financial health.


  1. Money and Mental Health: The Facts,” Money and Mental Health Policy Institute.
  2. Money and Mental Health: The Facts,” citing Holkar M., “Mental health problems and financial difficulty.” Money and Mental Health Policy Institute. 2019. Derived from “Adult Psychiatric Morbidity Survey 2014”: covers England only.
  3. Money and Mental Health: The Facts,” citing a Money and Mental Health Policy Institute survey of nearly 5,500 people who have experienced mental health problems.
  4. Money and Mental Health: The Facts,” Money and Mental Health Policy Institute.