THE INTERPLAY BETWEEN FINANCIAL WELL-BEING AND MENTAL HEALTH: A STUDY OF LOW-INCOME COMMUNITIES IN INDONESIA

Abstract

The connection between financial well-being and mental health has attracted considerable focus in recent years, especially as poverty remains a significant obstacle to the well-being of millions worldwide. Mental health research has largely concentrated on clinical aspects, with limited exploration of socio-economic factors such as financial well-being. This research lies in its integrated approach to studying the bi-directional relationship between financial well-being and mental health in Indonesia’s impoverished communities. This study adopts a quantitative cross-sectional design to investigate the bi-directional relationship between financial well-being and mental health among low-income households in Indonesia. The result of research are (1) this study corroborates a wide body of literature demonstrating that financial stability is strongly associated with improved mental health outcomes, (2) This research adds nuance to the bi-directional model by demonstrating the heightened vulnerability of low-income populations to this dynamic, (3) suggest that informal lending, commonly relied upon in low-income Indonesian communities, exacerbates financial instability and mental distress.