Beyond debt. A moderator analysis of the relationship between perceived financial strain and mental health

Heavy debt not only has economic consequences, but has also been related to severe psychological and physical distress. The present study investigates the relationship between perceived financial strain and mental health, and individual-level variables that moderate this relationship. Specifically it was expected that employment, access to the latent benefits of work, and self-efficacy would buffer the relationship between perceived financial strain and mental health. In a 2009 study conducted in Austria, among 106 people on the verge of bankruptcy, perceived financial strain appeared as the strongest predictor of distress. This effect was moderated by two out of five latent benefits of work and self-efficacy, but employment status failed to have a significant effect. The findings show the importance of subjective economic stress for the prediction of mental health among people in serious financial strain and indicate significant moderators of this relationship.

► Stresses the importance of subjective economic stress for mental health among persons on the verge to bankruptcy in Austria.
► Shows that self-efficacy, access to collective purpose and social contacts moderate this relationship.
► Self-efficacy and access to collective purpose softened the negative effect of perceived financial strain on distress.
► Access to social contacts improved mental health if financial strain was low.