The Role of Financial Wellness in Overall Wellness

When asked what keeps them up at night, 23% of Americans cite financial worries. This shows that if your finances are not in order, it can have a direct impact on your overall well-being. Here are a few ways managing your financial wellness can benefit your health both physically and mentally, as well as a few steps you can take today to alleviate financial stressors.

Physical health benefits of financial wellness

Financial strain and uncertainty about the future can cause stress, which can in turn cause a whole host of physical health problems.

In addition to minimizing stress – and therefore having more restful nights – working on your financial wellness may help you afford more preventative healthcare measures, like visiting your physician regularly, engaging in smoking cessation or weight-loss programs, purchasing gym memberships and nutrition classes, preparing nutritious food and more. Creating a budget for preventative healthcare measures may mean you spend less on large health costs down the road.

In addition to budgeting for preventative healthcare costs, working on your financial wellness also means keeping an emergency fund, which could be used if a larger health problem were to arise. Knowing you can cover an unexpected cost can go a long way in reducing stress and improving your overall health.

Mental health benefits of financial wellness

Just like being able to afford preventative healthcare is important to maintaining physical health, creating a financial plan to ease your worries about the future can go a long way in maintaining mental health.

When the 23% of Americans who reported losing sleep due to financial worries were asked which areas of their finances worried them most, they collectively cited these reasons:

• Saving enough for retirement
• Affording healthcare or insurance bills
• Making mortgage or rent payments
• Ability to pay for credit card debt
• Ability to pay for future educational expenses
• Managing stock market volatility

Luckily, many of these financial responsibilities can be expected and be planned for in advance. Especially for financial responsibilities you can foresee, it’s important you create a plan early on to include how and how much you will save in order to meet your goals.

For example, if you’re one of the 19% of Americans that cite saving for retirement as your top financial stressor, you may benefit from creating a plan to increase your monthly contribution rate gradually each month until you meet your goal. While you may not be instantly saving enough for retirement, some of your anxiety may be eased knowing you’re taking steps to improve your situation.

Similarly, if you’re one of the 6% of Americans citing stock market volatility as the biggest contributor to your financial anxiety, you may benefit from taking a look at your asset allocation strategy to diversify your holdings. While you can’t foresee stock market downturns, you can proactively prepare for them. Having safeguards in place can help put your mind at ease for whenever they occur.

Steps to take to improve your financial wellness

Ready to make changes today to improve your financial wellness, and in turn, your physical and mental health? Here are some steps you can take right away.

• Create an annual budget and find areas to cut overspending
• Choose one or two ways you will engage in preventative healthcare this year to reduce potential future health costs
• Start building an emergency fund to save for unexpected costs and understand when it’s appropriate to spend it
• Use our calculators to determine how much income you will receive in retirement and how long it will last. If you find you’re not on track to meet your goals, create a plan to make some changes. A good start is to meet with your plan administrator and increase your contribution rate.
• Consider ways to earn extra income, such as a weekend job or turning a hobby into a small business.
• If you’re able, consider investing any discretionary funds. Make your money work for you!
• Maintain a strong credit score by making regular payments, only taking on debt you can afford, and keeping your balances low.
• Reduce your debt, especially high-interest debt. Check out our calculators to help you determine your pay off goal, if debt consolidation is right for you, and more.