Today’s Biggest Workplace Challenge

The Influence Personal Finance has on Employee Health Related Outcomes
Numerous studies have examined the impact of stress on both physical and mental health, and have found correlations between stress and poor health outcomes. Stress has also been linked to absenteeism from the workplace, as well as decreased productivity. There are also many surveys that demonstrate that money is one of the leading causes of stress in America. Financial stress, like all stress, impacts mental and physical health, and it also has the added impact that people under financial stress do not always seek medical care when they need it, because they are concerned about the cost. While this may save money in the short term, this also may aggravate medical conditions in the long term, creating greater costs and the potential for chronic health problems.

Studies have also shown that Americans who have strong emotional support tend to report lower stress levels and better related health outcomes. Emotional support may take the form of one’s social network of family and friends, or programs that are designed to help people cope with their stress as well as address its underlying causes.

Financial wellness programs that include personalized support are one potential venue that can provide emotional support and education for individuals to achieve real behavioral change and to decrease their financial stress. In analyzing surveys taken by participants in a financial wellness program at the onset and after three consultations, program administrators have found that there is a correlation between participation in the program and improvements in overall personal financial wellness scores, improvements in self-reported negative health impacts and a decrease in the hours of low productivity at work caused by worrying about finances.

Stress & Health
There is significant research examining the various impacts stress has on people’s physical and mental health. One study found that stress at work is an important risk factor for the metabolic syndrome, which is a “cluster of risk factors that increases the risk of heart disease and type 2 diabetes” (Chandola, Brunner & Marot, 2006). Another study looked at the connection between the metabolic syndrome and stressful life events more generally, finding that “individuals who reported extremely stressful life events within finance- and work-related life domains had significantly higher odds for having the metabolic syndrome” compared to those who experienced stressful life events in other domains (Pyykkönen et al., 2010). The correlation was even stronger when there was an “accumulation of stressful finance-related events” (Pyykkönen, et al., 2010). Researchers have found correlations between work stress and the risk of cardiovascular disease (Kivimäki et al., 2002), higher rates of depression, and higher diastolic blood pressure, which is associated with higher risk of hypertension and stroke (Sweet, Nandi, Adam, & McDade, 2013).

While stress comes in many forms, money is one of the leading causes of stress in the United States (American Psychological Association [APA], 2015). Between 2008 and 2015, money topped the list for sources of stress, ranked higher by individuals than stress related to work, health problems, or family responsibilities (APA, 2015). Almost three-quarters (72%) of the population studied said they are stressed about money at least some of the time, and 26% say they are stressed about money most or all of the time. 88% of Americans say that their stress about money has remained the same (59%) or increased (29%) in the past year (APA, 2015).

Financial stress, like all forms of stress, correlates with poor health outcomes. When people are dealing with financial stress like significant debt, they are also more likely to self-report worse general health (Sweet et al., 2013; APA, 2015) and are more likely to report health problems as a whole (Choi, 2009). Among a population studied in 2008, of those reporting with high debt stress, 27% had ulcers or digestive tract problems and 29% suffered severe anxiety, compared to people with low debt stress who reported suffering from ulcers or digestive tract problems at 8% and severe anxiety at 4% (Choi, 2009). In a 17-country study in Europe examining data between 1995 and 2012, long-term unsecured debt and mortgage debt were correlated with poorer health outcomes (Clayton, Liñares-Zegarra & Wilson, 2015).

Financial stress is also related to making healthy choices; 32% of Americans say finances prevent them from living a healthy lifestyle (APA, 2015). Adults with high money stress also report that they are more likely than people with low money stress to resort to unhealthy stress management techniques such as watching television for two or more hours per day, smoking, drinking alcohol, eating, surfing the internet, and napping/sleeping (APA, 2015).

Financial stress also has indirect effects on health. 21% of Americans say they have considered skipping or have skipped going to the doctor when they needed medical care because of financial concerns (APA, 2015).

While it is difficult to quantify the exact cost of stress in terms of medical bills, 90% of the United State’s $3.3 trillion in annual health care expenditures are for people with chronic and mental health conditions (Centers for Disease Control and Prevention, 2019). Among the top ten most expensive chronic diseases for healthcare payers, six are often related to stress and making unhealthy lifestyle choices: cardiovascular diseases ($193.7 billion direct medical costs), smoking-related health issues ($170 billion direct medical costs), alcohol-related health issues ($249 billion cost to US economy; direct medical cost not available), diabetes ($176 billion direct medical costs), obesity ($147 billion medical costs related to obesity and $117 billion related to inadequate physical activity), and stroke ($33 billion direct medical costs) (Beaton, 2017).

Surveys have also shown that Americans with emotional support report lower stress levels and better related outcomes (APA, 2015). When people have emotional support, their overall stress level is lower, they are more capable of making lifestyle changes, and they are less likely to report feeling depressed or sad because of stress (APA, 2015). However, finding emotional support around financial stress may be difficult. 18% of Americans say that “money is a taboo subject in their family and more than one-third (36 percent) say that talking about money makes them uncomfortable” (APA, 2015).

Emotional support does not solely need to come from family and friends. Workplace programs have been found to have an effect on overall stress and related outcomes (Kim, Garman, & Sorhaindo, 2003; O’Neill, Xiao, Sorhaindo, & Garman, 2005; Rahe et al., 2002). One workplace program focused on stress, anxiety and coping helped significantly reduce illness and healthcare utilization, including a 34% reduction in healthcare utilization by full intervention subjects (Rahe et al., 2002). Another study looked at the relationships between financial practices, financial well-being, and the health of a sample of 3,121 financially distressed individuals who were clients to a credit counseling agency (O’Neill et al., 2005). While the study noted it was difficult to determine causation between positive associations found between self-reported health status and indicators of financial well-being, it also said “reducing debt and receiving help from the debt management program were the most frequently reported personal finance improvements associated with improvements in health status reported by respondents” (O’Neill et al., 2005).

Financial Wellness Programs
With the recent explosion in vendors offering financial wellness programs in the workplace, it is important to find a provider that specializes in offering live one-on-one financial coaching as the primary method for improving financial and health related outcomes. In addition to positive reviews from existing clients, be sure to look for positive trends in outcome areas such as increased financial well-being, reduced financial stress, improved work productivity, and increased employer 401k contributions when employees engage with the program and their dedicated financial coach.

References:
1. American Psychological Association. (2015). Stress in America: Paying with Our Health. Washington, DC: Anderson, N. B., Belar, C. D., Breckler, S. J., Nordal, K. C., Ballard, D. W., Bufka, L. F., . . . Wiggins, K.
2. Centers for Disease Control and Prevention. (March 4, 2019). Health and economic costs of chronic diseases. Retrieved from https://www.cdc.gov/chronicdisease/about/costs/index.htm
3. Chandola, T., Brunner, E., & Marmot, M. (2006). Chronic stress at work and the metabolic syndrome: prospective study. BMJ, 332, 521-525. doi: 10.1136/bmj.38693.435301.80
4. Choi, L. (2009). Financial stress and its physical effects on individuals and communities. Community Development Investment Review, 120-122. Retrieved from https://www.frbsf.org/community-development/files/choi.pdf
5. Clayton, M., Liñares-Zegarra, J., Wilson, J.O.S. (2015). Cross country evidence on the debt-health nexus. Social Science & Medicine. doi: 10.1016/j.socscimed.2015.02.002
6. Kim, J., Garman, E. T., & Sorhaindo, B. (2003). Relationships among credit counseling clients’ financial wellbeing, financial behaviors, financial stressor events, and health. Journal of Financial Counseling and Planning, 14. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract\_id=2265623
7. Kivimäki, M., Leino-Arjas, P., Luukkonen, R., Riihimäki, H., Vahtera, J., & Kirjonen, J. (2002). Work stress and risk of cardiovascular mortality: prospective cohort study of industrial employees. BMJ, 325, 857-861. Retrieved from https://www.bmj.com/content/bmj/325/7369/857.full.pdf
8. O’Neill, B., Xiao, J. J., Sorhaindo, B., & Garman, E. T. (2005). Financially distressed consumers: their financial practices, financial well-being, and health. Financial Counseling and Planning, 16(1), 73-87. Retrieved from https://digitalcommons.uri.edu/cgi/viewcontent.cgi?article=1007&context=hdf\_facpubs
9. Pyykkönen, A. J., Räikkönen, K., Tuomi, T., Eriksson, J. G., Groop, L., & Isomaa, B. (2010). Stressful life events and the metabolic syndrome: the prevalence, prediction and prevention of diabetes (PPP)‐Botnia Study. Diabetes Care, 33(2), 378-384. Retrieved from http://care.diabetesjournals.org/content/33/2/378.long
10. Rahe, R. H., Taylor, C. B., Tolles, R. L., Newhall, L. M., Veach, T. L., & Bryson, S. (2002). A novel stress and coping workplace program reduces illness and healthcare utilization. Psychosomatic Medicine, 64(2), 278-286. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.575.2078&rep=rep1&type=pdf
11. Sweet, E., Nandi, A., Adam, E., & McDade, T. (2013). The high price of debt: household financial debt and its impact on mental and physical health. Social Science & Medicine, 91, 94-100. doi 10.1016/j.socscimed.2013.05.0