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Money and mental health

When your employees are preoccupied with financial concerns, their overall wellbeing is likely to be compromised. For your organization, the potential consequences can include lower productivity and higher costs, among other barriers to success.

In brief
  • With personal finances identified as the leading source of stress in the US, there’s a clear link between employees’ financial health and their mental health.
  • When financial stress takes a toll on workers, employers can face increased turnover, higher healthcare costs, lower productivity and lower profits. 
  • Employers can benefit from taking a comprehensive approach to employee wellbeing with financial health as a key component.

In the aftermath of the COVID-19 pandemic and amid high inflation, rising interest rates, changes to student loan policies and 61% of US adults living paycheck to paycheck¹, personal finances are the number one source of stress for Americans. In a recent CreditWise survey, 73% of respondents named finances as a source of stress, ahead of politics (59%), work (49%) and family (46%).²

With money at the root of so much stress in our society, employers are seeing a clear link between employees’ financial health and their mental health. Given that workers’ mental health, physical health, happiness and engagement are all adversely impacted by stress, employers can strengthen their competitive advantage by taking a holistic approach to employee wellbeing. Financial wellbeing should be a core component of that approach.

The financial health-mental health connection

Several studies have shown a cyclical relationship between financial stress and mental health issues experienced by an individual:


First, financial stress impairs the person’s mental health.

Excessive debt and other financial challenges can cause the person to feel anger, shame or fear, and even lead to relationship difficulties, anxiety, social withdrawal or depression.


Next, mental health issues make it harder for the person to manage money.

Such issues might lead to buying items on impulse, making late payments on bills, piling up debt or feeling unable or unmotivated to save. The individual may struggle to make sound decisions about investing and employee benefits. They may be less likely to plan for retirement. The person’s livelihood could be threatened if they perform poorly on the job or fail to show up at the workplace.


Poor money management then leads to more financial stress and mental health issues.

The cycle is likely to repeat until financial stress and mental health issues have been resolved.


As evidence of how the situation can become prolonged, individuals who experience depression coupled with excessive debt are 4.2 times more likely to still have depression 18 months later than people without financial difficulties.³


Financial stress can also harm physical health. When stress becomes long-term or chronic, it can lead to medical conditions such as insomnia, fatigue, ulcers, hypertension, heart disease, stroke, diabetes or obesity. Stress can lead people to adopt unhealthy coping mechanisms, such as smoking, binge eating or excessive drinking. Some people may forego preventive health exams or put off needed treatment. Any of these scenarios relating to physical health can worsen financial or mental health that is already compromised.


The impact of employees’ financial stress on employers

When employees are preoccupied with financial problems, potential consequences for their employer’s operations include:

  • Higher absenteeism
  • More tardiness
  • Compromised work quality
  • Lower productivity
  • Strained relationships among coworkers
  • Higher healthcare costs
  • More on-the-job accidents
  • Increased turnover
  • Lower 401(k) participation
  • Lower profits

Workplace issues related to employees’ financial stress cost organizations about $3,000 per employee each year.⁴


Employers can benefit from a focus on employees’ financial health

Although many organizations have taken steps to address employees’ wellbeing, these efforts have often fallen short in the area of financial health. Fortunately, programs that address financial health are garnering increased interest among employers.


Among other positive results, a well-designed employee financial wellbeing program can result in:


To achieve such results, an employee financial wellbeing program should:

The EY Vitality Index

The EY Vitality Index is dynamic and interconnected with our holistic measurement of people’s experience at work. Vitality accounts for the four core pillars of wellbeing—mental/emotional, physical, financial and social health—and the positive conditions to create meaning, connections and daily energy. By measuring, predicting and influencing vitality, we can improve retention and create healthier, happier, high-performing individuals and teams.

EY Personal Finance provides a suite of financial wellness programs that help your employees improve their financial wellbeing and feel more confident about their money matters. By offering one-on-one financial planning and online resources and tools, we help your employees identify their financial needs and goals and take informed action to improve their financial security. To date, we have served more than 250 organizations and five million employees across the US.

Talk with us about how we can provide financial education, guidance and counseling to your employees.


Today’s employees, still feeling buffeted by the COVID-19 pandemic and related economic uncertainty, are more stressed about their personal finances than about any other issue. Among the repercussions for employers are lower productivity, higher healthcare costs and smaller profits. Employers can benefit from implementing an employee wellbeing program that includes financial health as a key component.

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