Mad over money: The relationship between finances and mental health - Sovereign Health Group
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12-29-15 Category: Mental Health, Stress


A landmark study conducted by psychologist Daniel Kahneman, Ph.D., and economist Angus Deaton in 2010 identified a financial benchmark of happiness that existed at a $75,000 annual income. As the United States was still recovering from an economic recession during its publication, more recent analyses have proposed that this standard has substantially risen. Kahneman has estimated that states like California have a current benchmark of $95,000 or more. As this target of emotional wellness and life satisfaction moves upward, more Americans will continue to miss its mark.

Additional research has further explored the relationship between money and mental health, particularly through stress.

Effect of income on stress

Money was the most recent and prevalent cause of stress reported by Americans at a dominant 64 percent, with work and other economic concerns trailing close behind. These sources and severities of stress were collected by the American Psychological Association’s Stress in America survey, which reached out to 3,068 individuals in 2015. Although this prevalence of financial anxiety was notable, the biggest finding was the influential factor of the country’s widening wage gap. In the context of a 10-point scale of psychological strain:

  • People who had an annual income above $50,000 measured a stress level of 4.7
  • People who had an annual income below $50,000 measured a stress level of 5.2

This has been the largest gap of anxiety between economic classes ever measured, especially in comparison to 2007, which showed no average differences between the same two groups.

Effect of debt on mental health

Along with yearly earnings, owing money is another source of psychological strain. A 2014 report published by the Urban Institute recorded that approximately 35 percent of Americans carry personal and delinquent debt. Furthermore, this typical combination of unpaid credit card balances, medical bills and utilities contribute to an average debt of about $5,178 per person.

In 2013, a study by Thomas Richardson, Psy.D., and fellow researchers from the University of Southampton reviewed a total of 65 previous pieces of research connecting debt and well-being. The majority of results painted a distinct picture of how severe debt was linked to a lower quality of health. In addition to higher rates of substance abuse, those with serious debt were much likelier to develop depression, anxiety disorders and psychotic disorders. Most of all, Richardson and his team found that individuals who successfully committed suicide were eight times more likely to have debt at the time.

Arta Bakshandeh, M.D., senior medical officer of Alignment Healthcare in Los Angeles, supported these statistics with his own experience. He said, “Of the patients that I would attribute their medical problems to stress, the overwhelming majority have money at the root … Most commonly, these patients complain of headaches, elevated blood pressure, ulcers, depression and moderate to severe anxiety.”

The lasting effects of financial stress are anything from harmless. According to the Journal of the American Osteopathic Association, stress-related issues make up 75 to 90 percent of all primary care visits. Taking all these factors into account, it is important that people know how to manage their money effectively. If someone in your life is struggling financially, contact Sovereign Health of California to help diagnose the source of the problem. Our representatives are available online or by phone 24/7.

Written by Lee Yates, Sovereign Health Group writer

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