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Can financial stability boost your health and wellness?

Posted by Alyssa Malmquist on April 28, 2022
Alyssa Malmquist
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When considering health and wellness strategies, the most likely changes tend to be nutrition, activity, and sleep. While those are all incredibly important, financial stability deserves a place on the list, too. Continue reading for a look at how financial wellness impacts your quality of life, along with some strategies to feel more secure.

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That doesn't mean having a chunk of ready cash in your savings account, or even robust investments. Stability is all about feeling a sense of control over your finances, even if you're living paycheck to paycheck.

With a stronger sense of awareness about where your money is going and how you can direct it in a way that reduces stress, it can be a boost for your emotional and physical health. 

Money's role in your health

One of the major ways that finances can impact your wellness is through stress, and it's possible you may have been feeling this long before the pandemic caused difficulty. If that's the case, you're far from alone.

A 2021 study by the Finra Investor Education Foundation and Global Financial Literacy Excellence Center found that even before Covid, a substantial share of U.S. households were feeling strained due to finances, in part because of problematic financial behaviors and decreased financial security. The report noted that 60% of adults ages 21 to 62 felt anxious when thinking about personal finances, and 50% reported feeling stressed about discussing the issue.

This type of chronic stress can be toxic to your health. Research indicates ongoing stress can have effects such as:

  • Disrupted sleep
  • Memory issues
  • Difficulty paying attention and making decisions
  • Lower immune system function
  • Higher likelihood of cardiovascular disease
  • Poor gastrointestinal function
  • Disrupted hormone regulation

The ripple effect can be profound. For example, poor quality sleep is linked to an increase in chronic diseases, which may necessitate a higher level of healthcare—and therefore can increase your out-of-pocket costs, especially if you lack health insurance. That can cause more stress, creating a cycle that may be tough to break over time.

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The good news is that you can create a sense of financial security that helps you feel more in control. There's a ripple effect there, too. When you have confidence in your financial health, your stress level can lower—helping you sleep better, have more energy, and make healthier food choices. From there, you might exercise more often, get fewer illnesses because of a robust immune system, and prevent health risks to your heart, gut, and brain.

Sometimes, all you need is one step in the right direction to open up a whole new path toward better health, and financial stability could be that starting point.

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Developing more financial stability

Whether you're about to retire and have a healthy nest egg or you're just starting out and need to watch every penny—or you're anywhere in-between—it's always a good time to look at where you are in terms of your financial health. Here are some steps to consider:

1. Track your finances for several months. Looking at one or two months of your spending will give you a good amount of information, but a better approach is to get the biggest timeframe possible. For example, go through your year in bank statements and categorize all your spending, from utilities to splurges. That way, you can start to see how much you're really spending and what trends might be happening.

For example, it's normal for spending to surge over the holidays, but maybe you've forgotten that August is filled with multiple expenses if that's your month for vacations or you have kids in school. You may notice you spend much more on car repairs than you remember—which means investing in a different vehicle might be a better and more affordable option. Creating a workable monthly budget will be the next step, but it's difficult to get those numbers without knowing how much you really spend first.

2. Be objective instead of regretful. Finances can cause a mix of emotions, from dread from seeing your spending to anger about loans that weren't repaid—or setbacks that were costly. That's completely normal. But try to see your finances with the perspective of what needs to be done, not as a way to berate yourself.

3. Talk to your benefits manager. If you're unsure about where your pre-tax and post-tax dollars are going from your paycheck, meet with your benefits manager to get a clear explanation of what's involved. That could lead to making meaningful changes that help you save more for retirement, switch healthcare plans, increase your insurance, or reduce your tax liability.

Your company could even have a financial wellness program you don't know about. This may include financial coaching, emergency savings funds, and education benefits.

4. See a professional. A financial advisor or financial planner may be more affordable than you think—and can offer more ideas for helping you eliminate financial risk. Like hiring any type of professional, it's a good idea to interview a few candidates and see what they offer, especially if you're considering moving toward making investments.

In general, just knowing that your financial stability is part of your overall health and wellness mix can be important. That might pinpoint the source of your stress so you can begin to address it in a way that prompts other health benefits, too.

For a fresh perspective on all 8 dimensions of health and wellness, download our free eBook. 

Topics: Members, Brokers, Employers

Disclaimer: The content in this blog post represents the clinical opinions of the providers at AllWays Health Partners and is based on the most currently available clinical and governmental guidance.

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