The correlation between financial instability and mental health is more pronounced than ever. Credit union executives must work to understand this connection for member well-being as well as organizational resilience.
Recent data underscores the profound impact financial stress has on mental health. According to a 2023 Bankrate survey, 52% of U.S. adults reported that money negatively impacts their mental health, marking a significant increase from 42% in 2022. Financial strain can manifest as anxiety, depression, restless sleep and more. May being Mental Health Awareness Month, we decided to explore the connection between money and mental health.
Inflation is a primary driver, with 68% of those affected citing rising prices as a significant concern. Other critical factors include insufficient emergency savings (56%), debt (47%), and housing costs (42%).
The growing impact of financial stress on mental health, work and relationships
The younger workforce is particularly vulnerable. The Hartford's 2022 research found that 67% of workers aged 18–34 reported financial stress negatively affecting their mental health. Employers are most likely to address psychological and physical health issues rather than financial health issues, despite research pointing to the significant impact financial stress can have on work.
Millennials and Gen Z, in particular, expect financial education from their employers. However, it’s not necessarily their expertise. This is a perfect opportunity for credit unions to step in as trusted financial partners for businesses within your field of membership.
Financial stress doesn't just affect individuals—it has broader implications. BrightPlan's 2023 Wellness Barometer Survey revealed that 92% of employees experience financial stress, with 72% noting a decline in mental health and 60% reporting physical health issues. Notably, 64% stated that financial stress has strained their relationships, and nearly three-quarters have skipped social events due to financial concerns.
For employers, this translates to decreased productivity and engagement. Financially stressed employees report losing over a day of work per week, costing U.S. employers nearly $200 billion annually.
The role of credit unions in addressing financial and mental well-being
Credit unions are uniquely positioned to support members through financial challenges. By offering comprehensive financial wellness programs, credit unions can help mitigate the mental health impacts of financial stress.
Key initiatives
Financial education: Provide resources and workshops on budgeting, saving, and debt management to empower members with financial literacy.
Emergency savings programs: Encourage and facilitate members to build emergency funds as a financial safety net.
Affordable lending options: Offer low-interest loans and flexible repayment plans to help members manage debt without added stress.
Mental health support: Partner with mental health organizations to provide members with access to counseling and support services.
Financial support: Skip-a-pay and small-dollar loans are options for the occasional financial pinch.
Building a resilient community
Addressing the intersection of mental health and money benefits individual members and strengthens the entire community. By proactively supporting members' financial and mental well-being, credit unions can foster loyalty, trust and long-term stability.
As we navigate these challenging times, let's reaffirm our commitment to holistic member support, recognizing that financial health and mental health are deeply interconnected. That’s how credit union make members for life.
