Money and Mental Health: The critical role of financial education

Is money a source of stress in your life?  For many of us, money plays a vital role in how we feel and how we function every day. In fact, according to a Capital One survey, 73% of Americans rank their finances as the No. 1 stressor in their lives[1].


As a Latina and finance professional, the connection between money and mental health has been a constant influence in my work, particularly after working closely with women entrepreneurs dealing with the economic challenges of the pandemic in Ventura and Santa Barbara counties.


Whether thinking about our finances or experiencing financial hardship, the impact that our finances have on our mental health should not be underestimated. In fact, research shows that the stress associated with an issue like debt, is associated with triple the incidence of mental health conditions like anxiety, stress, or depression[2].


Of more concern is that this impact disproportionately affects women and historically marginalized communities- people already experiencing a lack of access to affordable mental health services and the Financial Education and support they need.  Rita Burks, principal at a dual language elementary school in Monterey Bay, and fellow HOPE Leadership Institute graduate, pointed out: “Those who are suffering from poor mental health have a harder time earning and managing money which can lead to problematic debt and other financial difficulties. Poor mental health also makes it more difficult to ask for help, further enhancing the stress and anxiety they may be experiencing.”

Central Coast Community Demographics

According to the Central Coast Equity Study[3], in Santa Barbara County, over half (52%) of Latina women, 47% percent of Latino men and 43% of Black women live below 200% of the federal poverty line, rates higher than any other group. Comparable figures in Ventura County show that around 40% of Latina women and men and 27% of Black women are living in economic hardship countywide, compared with 17% of white women.

If we also take into account other financial challenges, Ventura and Santa Barbara counties ranked 5th and 11th highest in the percentage of rent-burdened households nationwide in 2018, meaning these households pay more than 30% of their income on housing.

The critical role of Financial Education

Having access to Financial Education means gaining the basic tools to understand and effectively use financial skills, such as saving, budgeting, and investing, which can make a profound difference in someone’s overall well-being.

The impact of not having access to Financial Education at an early age can be seen through the financial challenges affecting most adults, particularly Latinas(os).

  • From 2015 to 2020, Latinas(os) were two times more likely to fall victim to predatory loans (such as auto or payday loans) than White people.
  • Differences in financial knowledge accounted for 30% to 40% of retirement wealth inequality.[4]


According to Next Gen’s 2021 annual report on the state of Financial Education, California ranks 49th in the nation in terms of access to Financial Education, which currently means that while 70% of high school students nationwide have access to a personal finance elective or a guaranteed course, only 26% in California do.

The good news is there are two bills, AB2215 and AB2051, under revision by the state Assembly’s Education Committee, that could significantly increase access to Financial Education for California’s students.

Where do we go from here?

Here are three areas I recommend our government and community leaders continue to focus on:

  • Require Financial Education to be implemented in K-12 schools at a state and local level
    • Ensure that we are utilizing culturally relevant and inclusive curriculum.
    • Ensure equitable and traceable funding for Financial Literacy programs that isn’t based solely on attendance numbers but based on income levels and other need-based metrics.
  • Increase access to multilanguage financial education beyond the K-12 classroom
    • Embed Financial Literacy within workforce development programs and retirement benefit provisions.
    • Encourage the formation of Financial Education coalitions and collaboration to leverage existing resources and community assets.
  • Prioritize equitable funding to increase Mental Health services in schools and to fund additional research to better understand the link between financial literacy and mental health.

The consequences of not having access to financial education are directly connected to the mental health and wellbeing of our communities which is why we must continue to address the root causes of these issues holistically and in collaboration.  To learn more about WEV’s efforts supporting Financial Education and Empowerment please visit:


Irene Kelly is a recent graduate of the HOPE Leadership Institute and contributed this piece as part of a cohort capstone project looking at the state of mental health in her community. The HOPE Leadership Institute is the first and only statewide leadership program specifically designed for professional Latinas in California. The goal of the Institute is to train Latinas in vital leadership and advocacy skills, enabling them to create fundamental change within their local neighborhoods and across California.


WEV is a U.S. Small Business Administration’s Women’s Business Center and Microlender, as well as a certified Community Development Financial Institution (CDFI) dedicated to the economic empowerment of women. WEV is a business resource network for anyone looking to start a business, grow a local business, or improve their business skills. WEV provides a full range of small business support – including classes, consulting, and funding – as well as financial literacy programs in Santa Barbara and Ventura counties. While WEV’s focus is on women, it welcomes people of all gender identities into the WEV community. Business courses, programs and loans are provided in English and Spanish.


#financialresilience #financialempowerment #personalfinance #financialsuccess 


[1] (07-20-21)
[2]  Hospitals, health systems can help patients avoid medical debt – STAT ( (04-26-22)
[3] Conducted by UCSB and the Fund for Santa Barbara (05-31-22)
[4] Lusardi, Michaud, Mitchell,” Optimal Financial Knowledge and Wealth Inequality” April, 2017