Children living in financial hardship face a higher risk of bullying, anxiety, depression, and substance use, especially when poverty occurs early and persists over time.
A new fact sheet from the Wisconsin Office of Children’s Mental Health highlights how financial stress impacts developing brains and long-term well-being. Director Linda Hall says children’s brains are highly sensitive to stress, but positive environments and support systems can help offset those effects.
The report also notes that rising out-of-pocket behavioral health costs can increase financial strain on families, further impacting children’s mental health.
Experts say public policies play a key role in reducing childhood poverty. Programs like the Earned Income Tax Credit, Child Tax Credit, SNAP, and housing assistance have been shown to improve outcomes. Since expanded Child Tax Credits ended in 2021, child poverty rates have sharply increased.
The report adds that many young people are pessimistic about their financial future, with research showing those struggling to meet basic needs often experience the worst mental health outcomes.
State officials are urging action at all levels—from policymakers to parents—to reduce financial hardship and better support children’s mental health.
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