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A landmark 5-year study is seeking to understand the link between money and human flourishing. Here’s how its findings could change the world



Daniel Shakhani is co-founder and chairman of the Financial Inclusion Alliance. He leads a global campaign for financial literacy launched at the World Economic Forum in 2023, following the passing of his brother-in-law Lenny Borger, with the audacious goal of positively impacting 1 billion lives.

In an era of rapid change and unprecedented challenges, the pursuit of human flourishing has become a shared aspiration worldwide.

Now in its second year, the Harvard Human Flourishing Program is a landmark five-year study that investigates the factors influencing human flourishing across 22 countries, involving around 240,000 participants over five years. This groundbreaking initiative seeks to explore and understand the fundamental elements that lead to a life well-lived, with a particular focus on the significance of financial well-being.

Over five transformative years, the program delves deep into the complexities of human life, examining not only the traditional markers of success but also the intangible components that contribute to overall well-being. The findings so far have been nothing short of revolutionary, uncovering a profound truth: The undeniable connection between financial well-being and the ability to lead a flourishing life.

The intersection of financial health and mental well-being is rich with implications for policy, personal finance education, and societal health. The synthesis of key findings from these papers highlights the profound and nuanced role that financial conditions play in influencing both physical and mental health outcomes.

The papers collectively emphasize the protective roles of financial safety, security, and capability against mental health challenges, while also presenting financial distress and debt as significant risk factors for depression and anxiety. Here’s what can we learn from the highlighted findings:

Financial perceptions as mental health protectors

The perception of financial safety and the ability to make sound financial decisions emerge as a critical shield against mental health issues. This underscores the psychological dimension of financial health, where the subjective feeling of financial security can significantly impact mental well-being.

The double-edged sword of debt

Debt is not just a financial burden but also a mental one, with a direct correlation to increased risks of depression. This emphasizes the need for strategies to manage or mitigate debt as a part of mental health interventions.

Financial capability as a health determinant

The ability to manage monthly expenses and engage in financial planning is associated with reduced odds of depression and anxiety. This links financial literacy and capability directly to health outcomes, suggesting that improving financial skills is a pathway to better health.

Policy implications for financial and health equity

The findings call for policy interventions that ensure income security, protect against income shocks and provide equitable access to health insurance. The stark differences in health effects of financial distress between countries with strong and weak welfare systems point to the critical role of social safety nets.

The role of financial education

Financial literacy is not just about promoting savings but also fostering a comprehensive understanding of financial management, which can lead to healthier financial behaviors and, by extension, improved mental and physical health.

Financial control as a well-being promoter

The concept of financial control—having the knowledge and skills to manage one’s finances effectively—is highlighted as a significant factor in promoting emotional and physical well-being. As reported in the forthcoming research by FinFit in collaboration with HR Dive, 55% of employees state they are looking for access to long-term financial planning. This extends the conversation to the importance of financial education and the empowerment of individuals through financial knowledge.

Beyond immediate solutions to financial distress

Addressing financial distress requires a holistic approach. It necessitates a deeper understanding of financial behaviors, tools, and interventions at the moments that matter in your life, alongside the promotion of financial skills and capability for long-term well-being.

The differential impact of credit sources

Research into credit sources and life satisfaction hints at the importance of understanding the complex roles different types of credit play in life satisfaction and well-being, further highlighting the relationship between financial health and overall well-being.

These early findings call for a holistic approach to financial education, policymaking, and mental health support that acknowledges the profound impact of financial conditions on an individual’s life.

We must reconsider how society addresses financial education, mental health, and the societal structures that support or undermine financial and emotional well-being.

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