Financial well-being is crucial to physical and mental well-being. This Wealth With Sophia columns looks at the impact of financial stress on overall health and shares some of the ways we can improve our financial wellness
In today's fast-paced world, we often separate different areas of our lives, failing to recognise the important connections between them.
One crucial connection is the relationship between financial well-being and our overall health. Here, we look at how financial stability contributes to both physical and mental well-being and how we can ensure that our financial wellness contributes to a full circle of health that can significantly improve our quality of life.
What is financial well-being?
Research shows that poor financial well-being is linked to increased stress, anxiety and even physical health issues. On the other hand, feeling financially stable and in control of one's finances can contribute to improved overall wellness.
A PwC report showed that nearly 60 percent of employees with access to a financial wellness programme reported improved mental and emotional well-being. This also translated into less stress in their family relationships and greater overall satisfaction with the job and their personal lives.
Key elements of financial well-being include having a budget and sticking to it, building up emergency savings for unexpected expenses, paying bills on time and avoiding excessive debt, planning and saving for long-term goals like retirement, and feeling confident in one's ability to manage money. This all leads to a sense of financial security and control.
How can greater financial well-being improve mental and physical health?
Financial stress is one of the main determining factors in overall personal well-being according to research. In particular for women, the gender pay gap and gender investing gap result in women earning less, living longer and retiring with less money, which can add to financial insecurity. Improving financial wellness can have a positive impact in the following areas:
- Reduced anxiety: Financial insecurity is a significant contributor to anxiety and depression. The constant worry about paying bills, managing debt or planning for the future can take a severe toll on our mental health. By achieving financial stability, we can reduce daily stress and improve our overall mood and outlook on life.
- Improved relationships: Financial stress often strains personal relationships, particularly with partners and family members. When we're financially stable, we can reduce conflicts over money and build stronger, more supportive relationships. These improved relationships contribute significantly to our mental well-being, creating a supportive environment that further enhances our financial and physical health.
- Physical health: Financial stress is a silent killer that can wreak havoc on our physical health. When we're constantly worried about making ends meet or drowning in debt, our bodies respond by releasing stress hormones like cortisol. By achieving financial stability, we can significantly reduce this stress, allowing our bodies to function optimally and maintain better overall health.
- Healthier lifestyle choices: Financial stability often correlates with the ability to make healthier lifestyle choices. When we're not constantly worried about money, we can make better choices that contribute to better physical health, creating a positive feedback loop that further enhances our financial well-being.