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Financial Well-being and Your Health

January 26, 2022
Financial well-being can have a strong impact on your mental and physical health. To address our whole health, we need to understand the social, physical, and mental drivers that impact our health. Financial stress is one of them. But you can learn some simple ways to increase your financial health.

What is financial well-being?

Financial well-being can have different meanings for different people. But it typically includes a sense of financial security and the freedom of more choices. 

Financial well-being includes the ability to:

  • Meet financial obligations
  • Spend wisely
  • Build savings for long-term and short-term goals
  • Enjoy the freedom of having greater choices now and in the future

According to a recent survey, one-third of Americans are financially healthy while half are struggling with at least some aspect of their finances. While we often believe that making more money means less financial stress, consumers can experience financial stress regardless of income.  

Financial health can be influenced by numerous factors:

  • What surrounds you in your family and community
  • How you feel, think, and act
  • What you know about money and what you do with it
  • Opportunities available to you
  • Your satisfaction level with your financial situation

Money continues to be a leading source of stress for Americans. A recent survey from the American Psychological Association revealed that most respondents were stressed about finances at least some of the time.

  • 72% of adults said they felt stressed about money some of the time.
  • 26% report feeling stressed about money most or all of the time.
  • And almost 25% reported having extreme stress about money during the past month.

The role financial stress plays with overall health

Stress is a natural response that actually helps you respond to serious situations or danger. But when stress is ongoing with no time for recovery, it can disrupt your mental and physical health.

Ongoing or severe financial stress can lead to a number of health issues such as:

  • Sleeplessness
  • Anxiety
  • Fatigue
  • Depression
  • Headaches
  • Weight gain or unhealthy weight loss
  • Unhealthy coping choices like poor food choices, alcohol, and drug use
  • Weakened immune system
  • Flare-ups of current chronic medical conditions

Plus, one in five people who are stressed about money say they put off going to the doctor when they need care, due to financial concerns. Delaying routine exams and preventive cancer screenings can make it difficult to catch medical issues early when they are easier and less costly to treat.

Remember that it is important to continue making your physical health a priority as you work on improving your financial well-being. Eating a healthy balanced diet, exercising regularly, and practicing stress reduction techniques (taking a walk outside, meditation, mindfulness exercises, breath work, and yoga) can give you a more positive outlook.

A path to financial well-being

The good news is that resources are available to help with financial anxiety and set you on the path to better health. And you can take steps, no matter how small, that add up to a major impact in your finances.

Seek emotional support

Those who are stressed about money report being better able to cope when they have emotional support.

  • Talk to a family member or close friend.
  • Visit a therapist or counselor in person or online.
    • Many employers offer free or discounted counselling sessions through Employee Assistance Programs.
    • You can also access mental health care through video visits to support your whole health and well-being with through the Sydney Health 

Utilize employer programs

More employers than ever offer financial wellness programs to help employees take control of their finances and reduce stress. Financial wellness programs can help with money management skills such as:

  • Creating and sticking to a budget
  • Building up your credit score
  • Reducing debt
  • Financial goal setting

Start saving where you can

Contributing to a savings account regularly, even if it’s a small amount, is all it takes to get started. It takes a lot of discipline and commitment to save regularly. Automating the process can help make the decision “out of sight, out of mind.”

  • Employers can often direct deposit paychecks into multiple accounts. Banks also offer this service. Directing a pre-set amount of your paycheck automatically into a savings account means you don’t have to take time to deposit the funds yourself.
  • Automatic savings plans offer a convenient way to save money. They work by automatically depositing a set amount of funds into a savings account at specific times.
  • Round-up plans and apps work by rounding up to the nearest dollar when you make a transaction. The change is deposited into a savings account.

Examine your spending, then budget and spend mindfully

Without looking at where your money goes each week or month, you may spend more than you realize. Having a plan for your money and understanding where it is going will give you more control and lower stress levels.

Reduce your debt

Understanding your debt, credit score, interest rates, and how many creditors you owe is the first step to paying down your debt. The most common strategies for paying down debt are:

  • Pay off the highest interest rate debt first by making larger payments.
  • Pay off the smallest debt first and work your way up to the highest debt.

Save for the future, now

For someone living paycheck to paycheck, it can be difficult to set aside much for long-term investing. But directing even a small percentage of your income to savings can make a difference over time. Today many employers offer 401K plans with matching funds. And a variety of other savings options allow you to invest small amounts of money to build up your long-term savings.

Financial stress and mental and physical health are closely connected. Creating a plan to take control of your financial well-being can reduce anxiety and other symptoms of stress which can lead to improved whole-person health.