Financial Stress and Its Underlying Impact On Health

May 3, 2017

Money woes can seem overwhelming — and that stress can have a spiraling negative impact, especially on adults already dealing with poverty.

It’s easy to just tell someone to create a budget, balance their checkbook, or just get a job. But those are all financial literacy skills that are more easily discussed than implemented. Increasingly, research has found that the stress of poverty can keep families from breaking out of poverty; that financial stress can weigh on all aspects of adult life; and that financial stress can even manifest physically.

The stress of figuring out finances isn’t relegated to just impoverished families. It’s such a vital issue that the Society for Human Resource Management says 2017 may be “the year of employee financial wellness programs,” as more employers offer their workers financial counseling. With more than half of all workers saying that they suffer from financial stress, that stress could have a negative impact on numerous aspects of their lives including their work life.

But worrying about how to pay off student debt or fund retirement is different then weighing whether to pay rent or utilities, but not having enough to cover both. When money does free up, it’s harder to make the type of long-view decisions that more well-off families might.

“A growing body of literature now shows that poverty makes people more stressed,” Johannes Haushofer, an MIT researcher, tells Fast Company. “Stress makes people risk-averse, and it makes them more short-sighted, in the sense that they are more likely to make decisions that benefit them sooner than in the long term. That may put a limit on how much you are willing to invest in the future, in terms of health care, education, and so on.”

A study published in 2013 found that poverty involves so much stress that people in difficult circumstances don’t have any capabilities left over to juggle new tasks, like earning a degree or finding a new job.

“Solutions that make financial life easier for poor people don’t simply change their financial prospects,” notes a story in The Atlantic. “When a poor person receives a regular direct-deposited paycheck every Friday, that does more than simply relieve the worry over when money will come in next.” The easy, regular deposit is one less thing to worry about — they know exactly where the next paycheck will come from, and when to expect it.

But even that may not be enough.

Another recent study linked financial stress with physical pain. Households with two unemployed adults spent 20 percent more on painkillers than those with at least one working adult, according to Psychological Science, which also notes another study that found that people struggling economically reported “almost double” the amount of physical pain than those who weren’t economically stressed.

There’s also the psychological impact, in ways that are akin to depression — this is who I am, nothing can change, why bother.

“We don’t plan long-term because if we do we’ll just get our hearts broken. It’s best not to hope. You just take what you can get as you spot it,” wrote one person, describing his negative mindset, as noted in The Atlantic.

There’s a tendency, sometimes, to assume that it’s a simple lack of education or money, or even an abundance of laziness, that causes families in poverty to remain in lower economic tiers. But these studies are just the tip of a growing field demonstrating finances and stress can lead to deep mental and physical issues and take more than sheer willpower to overcome.