Can financial counseling be used as a tool to help alleviate financial-related depression symptoms in adults?
Quick Summary
The literature examined by the authors considered the relationship between financial stressors and mood disorders–specifically, depression. They found that generally financial stress is positively related to depression symptoms. In addition, three key factors affect the relationship:
- Having a lower income leads to more economic uncertainty, unhealthy lifestyles, etc. (social causation)
- How the financial stress is viewed by the person-how manageable or unmanageable is the current financial situation (does it cause psychological stress)
- Already having a mental health disorder (social selection).
Key Insights
The authors noted the following key findings:
- Lower level of household income is related to a higher risk of depression symptoms
- A decrease in household income is related to an increased risk of depression symptoms
- Small numbers of household assets (cars, furniture, etc.) are related to an increased risk of depression
- An increase in household wealth is related to a decrease in risk of depression symptoms
- Debt is positively related to depression symptoms but varies based on the type of debt
- Current financial hardships matter most in terms of depressive symptoms
- Financial strain (current or in childhood) may affect depression symptoms
- The correlation between financial stress and depression symptoms is more pronounced in lower-income groups
My A-HA Moment
My client’s mental health can be affected by their financial health and this is an important consideration, especially for those clients who may come from a lower socioeconomic status. In particular, recognizing that some of my clients dealing with unsecured debt could be affecting their mental health, I will focus on improving their situation through financial counseling, focusing especially on debt management–hoping to foster a positive effect on their mental health.
Continuing the Discussion:
As mental health issues have increasingly been part of the national dialogue, I am interested in learning more about changes to your best practices.
- How are you considering a client’s mental well-being in tangent with their financial well-being?
- Have you changed your client conversations around financial-wellbeing and mental health?
- Could financial counseling community outreach in lower socio-economic areas decrease depression symptoms?
Written by: Jennifer Witkowski, AFC® Candidate
Read the full research paper here.
Thank you Jennifer. This is such as serious issue, and I having been finding that individuals appear to be more depressed–primarily due to the social causation issues you noted. Uncertainty is not our friend. You also asked” Have you changed your client conversations?”
I would say, yes! I believe that in addition to providing access to tools and resources, I spend quite a bit more time, cheerleading and trying to build hope. And actually, that helps me feel better as well.
This is a seriously important issue. My recent research of Money, Mental Health and Adolescents revealed that teens’ subjective assessment of their financial status and the way they relate to that can be a key identifier of mental health issues. Mental health screenings rarely ask anything related to finances yet many kids with no outward signs of behavioral issues or mental stress are becoming more and more isolated and overwhelmed with their responsibilities to help support their family or the sense of hopelessness that they can’t make a difference. Covid has just exacerbated an already difficult situation.