The link between financial wellbeing and mental health is well documented, but are we consigning future generations to a vicious cycle of money troubles and anxiety? And what are the potential knock-on effects of that mental stress? To mark Mental Health Awareness Week, Catherine Winter – our Managing Director of Financial Education and Community Outreach – looks at the relationship between money and mental wellbeing and how financial education can help.
Financial trouble leads to stress and anxiety, which in turn leads to deteriorating mental health, which again impacts financial wellbeing. It’s a vicious cycle.
Among many other problems associated with financial difficulty is the stigma around debt, which can lead to people becoming isolated. Isolation increases loneliness – the theme of this year’s Mental Health Awareness Week.
But how do we break these vicious cycles and tackle rising anxiety about money – particularly among young people, who are increasingly anxious about finance?
Figures from our most recent Young Person’s Money Index (YPMI), show that anxiety about money among young people has increased to 81%, up from 67% last year. Unsurprisingly, 72% of 15–18 year olds – and 85% of 17–18 year olds – want to learn more about money in school.
How do young people learn about money?
Our YPMI 2021 found that 73% of students said they have access to financial education compared to only 29% in 2015. That’s a huge improvement, but only 15% cited school as their main source of financial education.
Most (56%) report learning money management from their parents. This can be a problem if parents aren't skilled with personal finance as they may not know the best way to advise their children.
Perhaps more concerning is that a quarter of respondents say they're self-taught – more than double last year's figure. "Self-taught" could include anything from learning money management on TikTok or from social media influencers, to reading websites.
To avoid financial distress and problems in the future, young people need a reliable source of free financial education now.
How to help young people learn about money
Most young people in our survey want to learn about the practicalities of managing money well, including:
- budgeting
- debt
- tax
- different financial products.
Our new Level 2 Technical Certificate in Finance (TCF) is designed to give your students a detailed introduction to the world of finance. They’ll learn about financial services, financial products and finance in business whilst developing transferrable skills required for a successful career within the sector.
However, we recognise that finding the time to offer financial education during teaching hours can be difficult. So, we’ve developed resources that help teachers and schools offer financial education without making demands on your time.
Our award-winning online programme, Lessons in Financial Education (LiFE), allows students to learn money skills independently. Students might access the course in tutor time, after-school clubs or during other enrichment opportunities.
LiFE uses animation, games and music to teach personal finance. The online format is very accessible, makes financial education fun and caters for different learning styles. It covers:
- spending and budgeting
- insurance
- borrowing
- types of payment cards
- using money abroad, and
- routes into financial careers.
Mental Health Awareness Week
Knowing how to manage your money is an essential life skill. Young people want to be financially resilient, and the impacts of Covid-19 – and the rising costs of living – are all taking their toll.
The CEO of the Mental Health Foundation, Mark Rowland, has described this week as an opportunity to ask “how we will reduce loneliness as we continue to come out of the pandemic, and live with Covid-19 in a different way”.
Giving young people the financial education they crave, is one part of the solution.
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