As if you needed more evidence that being “healthy, wealthy, and wise” is actually related, it turns out that your health and your finances are intimately linked. Recent studies have demonstrated that your financial life can have an impact on your health – mentally, emotionally, and physically. This includes such things as anxiety and depression, as well as general happiness. The idea is to ensure that the relationship between your financials and your health is functional in nature, as opposed to dysfunctional.
1. The link
There is no denying that living unhealthily is simply expensive. For instance, if you smoke 2 packs per day, that’s around $4,000 a year. If you weigh too much, a research study conducted by the George Washington University revealed that obesity costs men more than $2,600 and $4,900 for women annually. But the reverse is also true. Financial problems lead to health complications such as insomnia, anxiety, headaches, and backaches. And if you don’t feel flush enough to pay your dentist or doctor a visit, small problems can metamorphose into gigantic ones.
2. The science
Once you develop the motivation to boost one aspect of your life (whether it’s your health or finances), it can give you the strength to improve on the others. For instance, a certain study demonstrated that if you decide to contribute to a 401K, it can significantly affect how you look at your health after receiving bad health news. Hypothetically, if people were to be grouped into two basic categories (those who save and those who don’t), the savers tend to act on health information and attempt to improve their health, while the non savers simply sit on the information instead of acting on it. It is directly connected to what psychologists and economists call “time discounting” – the act of trading off the future with the present (or living for today against tomorrow).
3. Medical aspect
Overdue medical bills can lead to physical symptoms of stress (such as anxiety, insomnia, and migraines), as well as inadequate or delayed treatment. Financial distress can also make it hard to meet the recommended health maintenance practices, like eating the daily recommended five to nine servings of fruits & vegetables per day, and taking routine checkups. On the other hand, high costs of health can lead to reduced income available for saving, and even bankruptcy or poor credit history.
4. Quality of life
Being tight on your finances can significantly increase your stress levels by boosting the production of cortisol, the hormone involved in the regulation of stress. Chronically high cortisol levels can lead to serious complications, most noticeably insomnia and anxiety. Most people tend to cope by engaging in comfort food, which ultimately makes them tired and over-weight. When left untreated, the stress can cause family feuds as emotions run high. You can change all these by saving early and practicing living below your means. Since you’ll not need as much money to sustain your lifestyle, your stress levels will drop significantly. The stash you will have accumulated serves as a financial security, plus the lost weight and the harmony within the house will add tremendously to the value of your life.
Having the knowledge that you have what it takes to withstand any storm can be powerful. Science says that saving early will ensure that you and your family will be alright in case anything happens, which can radically influence your decisions at your job. You’ll not worry too much about losing your job, and this can actually help improve your performance. So how does this all get accomplished?
- Start with small baby steps
Willpower is a very limited resource, and studies have indicated that when you try to make too many changes at once, you are less likely to sustain them. Rather, try to change one bit at a time. For instance, paying a credit card debt of $5,000 may sound daunting at first, but when you break it down to $50 per week, the task becomes a lot less scary. You may decide to achieve a certain saving goal, and then set smaller tasks to take you there. You might garner some support for accountability, and then incentivize yourself to boost your motivation. The same things you do for your health can also apply in your finances.
- Make your job security a priority
Job insecurity and money troubles can take a toll on your health. Researchers from The Santa Fe Institute and San Diego State University followed American citizens’ Google search patterns and found that people were more worried about their health during the recession. Health related inquires related to back pain, ulcers, and headaches experienced a tremendous uptick, as well as depression and anxiety. In a nutshell, being secure in your job affects your health positively. If you don’t exactly love what you are doing, make an effort to incorporate more satisfying activities in your free time.
- Boost both types of health
While few things can compare to saving money when it comes to your financial health, the quandary is that the process is not necessarily a fun activity. This is probably why most people simply don’t do it. However, knowing that you have saved some money somewhere is fun, and can actually make you happier. In fact, 38 percent of those who have savings accounts have reported feeling very, or extremely happy, as opposed to twenty nine percent of those who don’t, based on research from the Ally bank. The study goes on to suggest that the more you save, the higher your likelihood of being happier, and that, generally, saving can have a more significant impact on your happiness than your income.
The hardest part of saving on a regular basis is actually getting started, and the earlier you start, the less you’ll have to save. Consider a person who makes $41,000 per year, saves 8 percent of pay, and earns a return of 4% points above the rate of inflation. If this person starts saving at 20 years of age, at age 65, he’ll have a retirement income of 29,000 dollars per year, which is equivalent to 71 percent of pre-retirement earnings and in a relatively acceptable range. If the same worker starts saving at 30 years, he will have $18,000 of retirement income, which is equivalent to a mere 43 percent of pre-retirement revenue.