The complex role of financial hardship in understanding depression among youth in Uganda

Financial stability plays a crucial role in individuals' mental well-being, with emerging evidence suggesting a complex relationship between financial factors and depression. This study addresses three fundamental questions: (1) what is the relationship between financial stability and depression? (2) to what extent is the relationship mediated by financial hardship? and (3) do these possible relationships differ by adolescents' age and gender?

A structural equation modeling (SEM) was conducted to examine the relationship between finance and depression using four variables: family income, diversified savings, financial hardship, and depression. The measurement of variables and structural models χ²/df ratio < 1; root mean square error of approximation (RMSEA) ≤ 0.09, and the comparative fit index (CFI) and the Tucker-Lewis index (TLI) > 0.90 were deemed acceptable. Invariance testing was also performed to assess if the structural model differed significantly based on respondents' age group.

The findings indicate that high school students living in households with higher-than-average income have lower perceived financial hardship than those from lower-than-average income households (β = -0.25, p < .001, SE = 0.05, R² = 0.06). Perceived financial hardship positively predicts depression (β = 0.38, p < .001, SE = 0.05, R² = 0.14). Also, the inverse indirect connection between diversified savings and depression, through the intervening role of financial hardship, trended in the expected direction.

The indirect and direct pathways from financial situation to depression, as evidenced in the study, point to the need for a multifaceted approach to understanding and resolving depression. Additionally, it accentuates the potential role of financial capability in addressing mental health.