Loneliness and financial wellbeing
By Anita Ward
While few people talk about it, loneliness is one of the greatest public health and wellbeing challenges of our time. Loneliness, and a lack of social interaction, is linked to a range of devastating wellbeing impacts, like Alzheimer’s disease, strokes, obesity, and even financial crises. It is a reality for far too many people in our society. A report from Cigna health insurer found that 50% of the US population experiences bouts of loneliness with younger Americans experiencing the highest levels. A Cleveland Clinic brain health study even reported an association between weak social connections and a reduction in brain health.
The emotional impact of loneliness is obvious, but loneliness has financial implications as well. When people feel excluded, they spend to feel the opposite. The linkage between financial, mental, social and physical wellbeing is undeniable. Social connectivity and relationship capital provide a foundation and network for financial wellbeing and dignity.
Without a support network, and feeling alone, people have nowhere to turn for financial help. Financial providers like the payday lender, the gold and silver buyer, and the auto title lender prey upon the vulnerability of the lonely in the most undignified ways. A basic human right should be financial literacy and dignity – the know-how to make good financial decisions, avoid debt and build credit. Without that knowledge, people turn to short-term loans with high interest rates, or compromise on paying bills when their money is exhausted.
According to CFPB, six in ten Americans say they couldn’t cover an unplanned $500 or $1,000 expense. Many people live in economic bondage, restrained by a lack of financial knowledge and economic opportunity and stifled by predatory lending and low credit scores. It is this lack of financial literacy that is a major cause of generational poverty.
Interestingly, women across all ages report higher levels of loneliness than men do. Women value close one-on-one relationships, but have fewer relationships to fill in the loneliness. When these relationships end, the feelings of isolation deepen.
Women today make up 47% of the workforce, yet compared to men, women still face considerable financial challenges. Working-women are concerned about their ability to pay the ever-increasing debt and have little savings. Unfortunately women also have lower levels of financial literacy and don’t know what they don’t know. The situation is fragile.
Employers can help. Workplaces offer a significant source for fostering relationships and supportive social networks. Employers are uniquely positioned to be a critical part of the solution. It is time to offer financial wellbeing coaching in the workplace, and to support the changing needs of an increasingly lonely population.