In 2015, a TD Bank survey was conducted among 1,444 consumers to further understand their opinions on the relationship between financial security and personal health¹. The survey results showed that a staggering 81% of respondents believe it’s easier to reach their goals when they feel financially secure, and 70% stated that financial wellness could have a positive effect on their health.
When you take a moment to think about these statistics, it begins to make sense. Financial security allows you to invest in your future, support your family, and frequently check items off your bucket list. Conversely, poor budgeting can have adverse effects on your physical and mental health, according to medical professionals and financial experts alike.
The Physical Toll of Financial Worries
Although everyone worries about money from time to time, financial concerns have become a chronic stressor for over 25% of Americans. The impacts of chronic stress can lead to a myriad of physical ailments due to the overproduction of stress hormones, such as cortisol and adrenaline, which can affect numerous parts of the body. The Mayo Clinic warns that excessive stress can increase the risk of:
- Digestive issues
- Heart disease
- Sleep disturbances
- Memory problems
- Muscle tension and pain
- Weight gain
Furthermore, medical professionals have noticed that constant stress can cause individuals to seek unhealthy methods of coping, such as abusing alcohol or drugs, smoking cigarettes, or overeating. If the financial burden is not addressed and taken care of in time, the worrying can put people at high risk for emotional and mental troubles.
Finances, Emotions, and Mental Health
The National Institute of Mental Health (NIMH) estimates that 40 million Americans struggle with an anxiety disorder, and 17.3 million suffer from major depression. Research conducted by psychologists has shown that those with chronic financial stress are three times more likely to develop a mental health condition, and those money problems can also worsen the symptoms of several mental illnesses².
Entrepreneur and financial expert Brett Whysel states that the links between mental health and financial management can lead to a “vicious cycle” that can quickly spiral out of control if the issues go unchecked³. Whysel explains the cycle in a series of steps:
- Financial difficulties are associated with stress and mental health challenges.
- Chronic stress and mental illnesses impair cognitive functions, such as decision-making.
- Poor mental health may affect the individual’s ability to stay employed, which can further increase their concerns about money.
Tips for Managing Your Health and Budget
Consumer finance expert Keri Danielski offers some helpful advice to those who struggle with managing stress during painful financial periods. Danielski breaks down her strategy into a few simple steps that help you decrease stress, improve physical health, and develop better budgeting habits:
- Take an honest personal assessment of your emotions and mental health to gauge if your money-related worries could be related to an emotionally-taxing situation, such as an unexpected life event or a significant life change.
- Create a budget based on the 50/30/20 rules: 50% of your budget for essentials, 30% for personal needs, and 20% for savings.
- As your finances improve, Danielski stresses that your savings should increase; not your spending habits!
- Don’t be afraid to talk about your financial worries. Talking it out with a close friend or family member can help you see your situation in a new light, relieve your stress, and help you re-focus on the positive parts of your life.
Financial Wellness Summary
Caring for your financial health helps lay a foundation that allows you to care for your physical and emotional health as well. Moreover, making healthy choices in other areas of your life also helps you cultivate a healthy financial nest egg for yourself and your family. Positive choices breed positive results.
Financial Wellness is one of Eight Dimensions of Wellness. Continue reading our Wellness Wisdom blog for more information about how you can take steps to improve the other seven dimensions of wellness.
(1) TD Bank (January 2015) Financial and Physical Well-Being Go Hand-in-Hand for a Majority of Americans, New Survey Finds
(2) Reiss, F; Meyrose, A.K; Otto, C; Lampert, T; Klasen, F; Ravens-Sieberer, U (March 2019). Socioeconomic status, stressful life situations and mental health problems in children and adolescents: Results of the German BELLA cohort-study.
(3) Whysel, B (June 2018) 3 Vicious Cycles: Links Among Financial, Physical And Mental Health