Financial Health and Mental Health Among Clients of a Community Mental Health Center: Making the Connections

People with mental illness often live in poverty (1–6). Many rely on public assistance, yet benefits can be difficult to secure and maintain and the income they provide leaves recipients in extreme poverty (7). Even so, a fear of losing benefits may dissuade recipients from seeking alternative income through paid employment. For many recipients, a meager but reliable stream of benefits is preferable to income from low-paid and insecure work (8).

Many people with mental illnesses struggle to meet basic needs with their existing income. People receiving Social Security benefits who are deemed incapable of managing their funds to meet basic needs may be assigned a representative payee—a family member, friend, attorney, or care provider—who manages their Social Security income on their behalf. Community mental health centers (CMHCs) have increasingly instituted on-site money management programs for clients, whereby the institution serves as a representative payee and may also offer financial counseling (9). Some people have a conservator of estate or of person (or both), whereby their financial or personal affairs are supervised by a legally designated third person.

Having a payee is associated with increased housing tenure and treatment adherence and with decreased hospitalization and substance abuse, particularly when payee arrangements are integrated with mental health care (10–12). However, reliable payees are inconsistently available, and payeeship may cause client resentment, provoke anxiety about loss of control over finances, and encourage dependence, given that it rarely includes support for developing greater financial autonomy (13). As such, the payee mechanism as currently experienced by many is not consistent with the principles of recovery-oriented care, which seeks to maximize persons’ rights to self-determination and opportunity to exercise choice in life decisions (4,14,15).

Many people with mental illnesses who struggle with their finances are not assigned payees or conservators (16). Typically no other support is available. People without payees suffer more financial hardship and financial victimization compared with those with payees (17). People with mental illness are more likely than those without mental illness to have little or no access to banking services (18), a status strongly correlated with poverty and financial hardship and shared by more than 20% of the U.S. population (19–21). Unable to store, save, and access their money cheaply and build credit or access financial advice, they may rely on costly and potentially predatory check cashers, payday lenders, and pawnshops (19,22,23).

Recent pilot interventions with a recovery orientation have been designed to help people with mental illness manage their money and build assets outside of the payee mechanism. These interventions, which provide financial literacy training and access to savings accounts, have had promising results, including increased financial security and well-being (24–26). Building on this work, this study examined financial-management issues affecting low-income people with mental illness. The study sought to examine financial issues in the context of a broader framework of community inclusion and citizenship. In this context, financial issues are assessed in terms of a person’s connection to the rights, responsibilities, roles, relationships and resources offered by society (27).

The purpose of this study was to better understand the financial circumstances of clients of a CMHC and their access to and satisfaction with existing financial-management supports. It assessed financial supports provided by the center and those available through mainstream banks and other financial services.

Methods

Participants and Setting

Thirty-nine people receiving services from a CMHC in Connecticut participated in six focus groups. Participants were a racially and ethnically diverse mix of men and women over age 18 who reported difficulty managing their finances, as per study criteria. Recruitment took place by posting flyers around the center. No attempt was made to achieve a representative sample of the roughly 2,000 current patients of the center for this qualitative study nor to identify the percentage of patients at the center who had difficulty managing their finances. Almost all patients of the CMHC, however, have incomes well below the poverty line.

Fifty-five direct-care staff providing services at the CMHC participated in five focus groups. They were a racially and ethnically diverse group of male and female social workers, skill builders, occupational therapists, employment specialists, recovery specialists, peer workers, and psychiatrists. The focus groups took place during regular staff meetings.

All participants provided verbal informed consent. Client participants received $10 in cash and refreshments. Direct care staff received refreshments only. The study was approved by the human subjects committee of Yale University. Currently, we are conducting in-depth individual interviews with clients and staff, building on the focus group findings. We will report the results of these interviews separately.

Procedures

Client participants were asked to complete a brief, anonymous written survey about their finances. No personal health information was collected. The hour-long focus groups addressed open-ended questions, including “How do you currently manage your money and how does that work for you?” “Are there people you talk to about your finances?” and “What do you think would help you to manage your money better?” Questions for direct care staff included “Do clients bring up problems related to their finances?” “Are you able to help clients with these issues?” and “Can you suggest other resources that might help your clients with their finances?” Participants were encouraged to share and discuss their perspectives and raise issues and questions not included in the initial list of topics.

Focus groups were facilitated by the first author, a social anthropologist with no previous clinical or supervisory relationship with any participants. Process notes were recorded on a laptop by a note taker. The first author met with the note taker after each group to review, correct, and expand on the notes. All authors individually conducted thematic analysis of those notes, reading and rereading them and using their judgment as professionals in the mental health and poverty and finance fields to identify key themes (28). They then met to review, identify, combine, and—finally—reach consensus on six key themes, which are discussed below. [A list of focus group questions is available as an online supplement to this article.]

Results

Client Participant Surveys

Of the 28 client participants who provided information about their income, 23 (83%) reported earning less than $1,000 a month. Of the 38 participants who provided information about their benefits, 27 (69%) reported receiving Supplemental Security Income or Social Security Disability Insurance. Of the 34 participants who provided information about monthly saving, 11 (32%) said they are never able to save money; only 3 (9%) said they are able to save something every month. Of the 33 participants who provided information about debt, 19 (58%) reported being in debt or arrears. Of the 38 who provided information about having a bank account, 19 (50%) reported having a bank account. All participants provided information about help managing their money, and 16 (41%) reported having some help managing their money (either a payee or conservator or informal support) (Table 1).

Focus Group Themes

Poverty.

All participants spoke of the intensity of clients’ experiences of poverty. Clients spoke of the difficulty of affording essentials. One said, “I take care of a family of six. . . . I can’t even afford toilet paper. By the time we pay the bills we don’t have anything.” Even those who were employed struggled financially. “I have two part-time jobs and I still can’t pay the rent,” said one.

Most clients did not have cars and shopped at local stores with few healthy options and expensive food. They shopped for furniture and electronics at rent-to-own retail stores, which charge high overall costs but allow consumers to make low monthly payments. Utility bills were a constant burden, with arrears threatening disconnection and damaging credit, further limiting opportunities to become financially secure. Some clients had creditors (often child support or student loans), and as a result, any income other than Social Security was subject to garnishment, reducing potential earnings and the incentive to find employment.

Some clients spoke of difficulty stretching money through the month due to impulse control or addictions. Others spoke of the double stigma of being both mentally ill and poor and said they sometimes overspent simply to experience the “normal” feeling of being able to spend for enjoyment. “You’re suffering for three weeks,” said one, “because you had no money and then you get new money, so you spend it to get yourself some joy.” Some participants who previously had more money said they spent money to remember how it felt.

Staff members were frustrated with clients’ decisions to purchase what staff considered unnecessary luxuries. Most staff, however, sympathized with clients’ desire to “feel normal.” They also understood how poverty affects clients’ relationships. Said one, “He [the client] says to me, ‘How can I even think about going out on a date when I don’t own a car or can’t afford a taxi? Who will want to date me?’” [Additional quotes about poverty and other themes are available in the online supplement.]

Coping strategies.

Clients reported relying on food stamps and food pantries. They also use careful shopping strategies, prepare restrictive monthly budgets, and discipline themselves to avoid impulse purchases. Some with substance abuse problems said they spend their money early in the month on unnecessary items to avoid succumbing later to a temptation to purchase drugs or alcohol. Some sell aluminum cans or self-rolled cigarettes or engage in prostitution for extra cash. Others sell food stamps and gift cards received as payment for participation in studies, accepting cash amounts lower than the card value in order to create more flexible spending options.

Social relationships provided important financial support. Many clients reported receiving money, food, or cigarettes from relatives and friends. Such supports can be costly, increasing pressure to return the favor with those who shared with them. To avoid sharing cigarettes, a common “currency” of sharing, many people buy “loosies,” single cigarettes that are costlier than cigarettes sold in packs. Others buy loosies to limit their smoking: “The trouble with a pack is, I’ll smoke it all in one day.” Some reported borrowing cash from friends and relatives, with the potential downside that some lenders charged high interest.

Representative payees or conservators.

Some clinical staff advised clients about finances on an ad hoc basis, but formal support was available only through a conservator or representative payee. The CMHC in this study has a money management program but it has a long waiting list. Some clients with payees or conservators valued the support. One said, “If I didn’t have [a payee] I would spend my check on the first day. I am happy with the way it is. . . . If I don’t get the money, I don’t use drugs and I don’t relapse.” Others, however, saw payeeship as an intolerable constraint on autonomy and choice. “I don’t want to sit and argue with someone about my own money,” said one. “It’s like getting an allowance from your parent.”

Formal financial services.

Many clients can’t or don’t open bank accounts because of past overdraft problems or fear of incurring high fees or having their accounts garnished. “I’d like to open a bank account but I owe child support,” said one. “I’m afraid if I put my money in the bank they’ll take it.” Clients without bank accounts may pay high fees to cash checks at check cashers. Clients with bank accounts generally were satisfied with them, particularly if they had a relationship with a specific employee. “I went overdrawn and got charged $35 but I know the lady,” said one. “She didn’t take it out of my account.” All clients wanted to be able to safely set aside some money without exceeding limits placed by the benefits programs on the accumulation of assets. “I wish I could put it in gold and just bury it,” said one.

Benefits disincentives.

First-time denial of disability benefits is common, and recipients were reluctant to risk losing benefits once secured. Staff said they know of programs that allow recipients to test their ability to return to work without losing their benefits, but as one put it, “The challenge is getting people to understand, believe, and act on it.”

Asset limits imposed by the benefits system made clients reluctant to put money in savings accounts. On receiving a retroactive payment from Social Security, one said, “They told me that unless I spent my money and kept my bank account under $2,000 they were going to take it away. [They] said to take it out of the bank and keep it at home. I live in a sober house. Yeah, right, I’m going to stuff $11,000 under my mattress? I had to go spend it. . . . If I have an emergency I don’t have any money saved up.”

Suggested improvements.

Both clients and staff suggested reforming the benefits system so clients can earn more income or save money without risking loss of benefits. Current incentives and protections, it seems, do not effectively motivate recipients to become more financially independent. All agreed that there is a need for payee or conservator arrangements to include “steps out”—a way, as one client explained, “to wean off a conservator, a program you could move through that would teach you independence. As it is, you either have one or you don’t.”

Most clients wanted advice and education on budgeting, managing, and saving money. Both clients and clinicians suggested forming peer-to-peer groups to share budgeting and shopping tips. Many clinicians spoke of personal efforts to help clients, but most said they would prefer to keep money and therapy separate, ideally through on-site referral options. Both clients and clinicians suggested that CMHCs develop relationships with community banks that offer low- or no-fee accounts for clients.

Discussion

This study explored client and staff experiences related to clients’ finances to gain a better understanding of how to support clients’ financial stability. We learned that clients were anxious about their finances, worried about making ends meet, and fearful of jeopardizing benefits payments by working, particularly given the low-wage, uncertain employment opportunities open to them. Although they lacked hope for the future, they worked hard to make the best of current circumstances (7), patching together financial coping strategies, the complexity of which exceeds those used by people with more secure and higher incomes (29). Recent research showing how preoccupation with money problems can impede cognitive functioning regardless of mental health status points to the possibly serious negative effects of such preoccupation on people with mental illness (30,31). Our findings suggest that normative conceptions of “work” fail to capture the labors of those who live with both mental illness and very low incomes.

Similar to other people with low incomes, clients managed their money by using cash, banks, check cashers, prepaid cards, loans, and informal social networks (19,22,23,32). Although some had bank accounts, others did not, usually because of previous mismanagement or because they wished to avoid paying fees or having their accounts garnished. Instead, they paid high fees for check-cashing services and prepaid cards. A recent survey of six low-resource New Haven neighborhoods, where many members of our sample population reside, found that 25% of residents were unbanked, comparable to the figure in similar communities nationwide (19); by comparison, 49% of our small sample were unbanked.

To our knowledge, this is the first research that highlights the problems associated with a lack of access to banks among people with mental illness. Because of low incomes and poor credit histories, clients cannot obtain affordable credit and may become trapped by costly installments or loan repayments. Thus even for those who manage their own money, choices around finances are constrained by structures “above the level of the individual” (33).

People with mental illness who are poor struggle to meet basic needs, sometimes because of substance use or impulse control problems (17,34) but often simply because of insufficient income (7,35). Our research adds a layer of complexity to this understanding, revealing the intense pressures associated with living in a society where wealth and consumerism strongly influence identity and perceptions of individual success or failure. The payee mechanism offers a vital service for some clients, but many resent losing control of their money. The dominant cultural norm and aspirational ideal in the United States is for people to work and manage their income to meet their needs, fulfill their desires, and plan for the future (14). Departure from this norm adds to the stigma already faced by people with mental illness (33). Having money provides the resources to engage in social activities and develop social relationships. In addition, the processes through which people secure money and use it to meet their needs connect them with others in ways that can either support or present barriers to their recovery.

Limitations of the study included the possibility that some participants may have felt uncomfortable sharing personal information or opinions in a group setting and that certain participants may have dominated the conversation. Because participants in the client focus groups were self-selected, we may not have heard from more reclusive clients or those who were less concerned about financial management issues. We are currently conducting in-depth interviews with individual clients and staff to gather more detailed individual narratives. A next phase of the study will include ethnographic observation of client financial habits in real-world contexts. Finally, given that economic opportunities and financial support available to people living in poverty, with or without mental illness, may vary across localities, the results of this study may not be generalizable.

Conclusions

We must understand the complexity of clients’ financial lives if we are to support their goal to become more financially secure. Support offered must be flexible enough to accommodate changing needs. Money management support as currently offered is critical, but it should be broadened to comprise a range of options to meet different needs at different times, maximizing clients’ self-direction and responsibility without compromising their security (36), including, for example, providing access to expert one-on-one financial counseling on an “as needed” basis and peer-led financial management support groups. Any support must be attentive to clinicians’ existing workloads and comfort with discussing financial issues with clients.

People with mental illness face multiple struggles in managing their finances, but many of these struggles are related to poverty, not mental illness. Interventions designed to help them achieve greater financial security and experience less finance-related stress should, therefore, build on the broader principles of financial inclusion and not automatically assume that financial mismanagement is a result of mental illness. Examples could include working with clients to set and incentivize savings goals and helping them to choose between and manage different products, including prepaid cards and bank accounts. Such interventions will support broader community inclusion goals and help to increase social awareness about the ability of people with mental illness to participate in mainstream services. Programs that encourage people to depend less on benefits and more on employment income are valuable. However, broader policy changes are needed to enable people to balance dependence on benefits and employment income. For example, by removing time limits on the programs mentioned above, persons with mental illness would be freer to seek employment without worrying about losing the security of benefits income. In addition, policies should be established that encourage people to build assets without fear of losing their benefits income and health insurance.