A Study on Financial Distress: Causes, Effect on Mental Health of Households and Recovery Strategies with Reference to Ernakulam District
Abstract
Money serves as a universal medium that enables individuals to meet their basic needs and improve the quality of life. Delayed payments and insufficiency of money leading to financial distress is a common concern in the present world. When in financial distress households engage in the process of borrowing and is unable to repay for the borrowings taken. This accumulates household debts. The study was conducted to identify the key factors contributing to financial distress, tests the association of financial distress and its effect on mental health of households using a Chi-Square Test and proposes potential recovery strategies of it. Data for the study has been collected from both primary and secondary sources. Area of the study is limited to the respondents of Ernakulam district with a sample size of 100. The data collected has been analyzed with the help of statistical tools and presented in the form of tables, pie chart and bar-graphs. The study concludes by identifying loss of job, medical emergencies, impulsive spending habits, poor money management and high interest payments as key factors contributing to financial distress. Chi-Square Test proves that there exists a significant association between financial distress and its effect on mental health. The observed frequency table depicts that people experiencing high financial distress tend to have poor mental health. The potential recovery strategies to reduce the challenges of financial distress includes financial literacy, proper planning and budgeting, creating and maintaining emergency funds, and controlling unnecessary spending. The study contributes to the field of behavioral finance by shedding lights on financial hardships and debt management.
Keywords
Financial Distress, Financial Hardships, Household Debt, Financial Literacy.
Citations
IRE Journals:
Uma P T S
"A Study on Financial Distress: Causes, Effect on Mental Health of Households and Recovery Strategies with Reference to Ernakulam District" Iconic Research And Engineering Journals Volume 8 Issue 7 2025 Page 674-677
IEEE:
Uma P T S
"A Study on Financial Distress: Causes, Effect on Mental Health of Households and Recovery Strategies with Reference to Ernakulam District" Iconic Research And Engineering Journals, 8(7)
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