In this paper we examine the associations among perceived financial strain and various health measures--including self-rated health, self-reported functional capacity, performance-based mobility, and mortality--in a sample of older Mexican-origin individuals. We employ the Hispanic Established Population for Epidemiological Studies of the Elderly, an eight-year longitudinal survey of over 3,000 Mexican-origin individuals in five southwestern states who were initially interviewed in 1993 and 1994. Although financial strain is associated with actual income and poverty, it is also associated with cognitive capacity, depression, and self-esteem, and while it is strongly associated with subjective measures, it has a weaker association with more objective measures, such as performance-based mobility and mortality. Financial strain appears to be part of a package of cognitions and emotions indicative of low morale or demoralization that has adverse effects on subjective health.