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How Financial Wellness Helps You Get Ahead

A happy couple reviews their finances to discover that their financial wellness plan is working.

Financial wellness recognizes that the choices we make about money have a direct effect on our quality of life. Let’s take a look at how smart money choices can have a real impact on your overall health and wellbeing.

Financial Wellness: Smart About Money, Smart About Health

Remember how we were all told to grow up healthy, wealthy, and wise? It turns out your health and your financial wellness might be more closely related than you think—and research shows wise money decisions can directly improve your physical wellbeing.

If you want to take better care of yourself and your family, it makes a lot of sense to start with your finances. Here we’ll take a look at what financial wellness is and how you can use it to help improve other areas of your life.

What Is Financial Wellness?

Financial wellness refers to a sense of financial security or resilience that has wider benefits for an individual and their dependents. The Consumer Financial Protection Board defines financial wellness as:

….a state of being in which you can fully meet your current and future financial
obligations while feeling secure in your financial future and making choices
that allow you to enjoy life.

The idea here is that good financial decisions have wider implications for your quality of life and taking positive steps to improve your financial stability and resilience can in turn improve other aspects of your life too.

How Does Financial Stress Affect Personal Wellbeing?

While many definitions compare financial and physical wellness in general terms, recent research has shown connections between financial stability and direct measures of health and quality of life. In particular, studies have found a direct connection between financial and physical stress.

A recent study by business consultancy PwC of 3,000 workers across a range of industries also found a direct link between financial concerns and real health outcomes. The study found that as a direct result of personal financial issues:

  • 34% of respondents reported a “major to severe” impact on their mental health
  • 33% reported a similar impact on their ability to sleep
  • 23% reported a direct impact on their physical health

A 2018 study by wellness site Everyday Health of more than 6,700 Americans of all ages found that financial worries were the leading source of stress across the board, while an annual survey by financial resources site Bankrate of 2,556 adults found that 23% reported losing sleep over money issues, including:

  • Saving enough money for retirement
  • Paying healthcare or insurance bills
  • Paying a mortgage or monthly rent bill
  • Managing credit card debt

The Bankrate survey also found that the number of Americans losing sleep over financial worries had dropped significantly from 32% in 2019. Analysts told Bankrate the change could reflect the positive effect pandemic stimulus projects, expanded unemployment benefits, and paycheck protection programs had on household finances.

The result suggests an improvement in financial health can be linked to real improvements in physical wellbeing over time.

Why Is This Important?

Financial wellness suggests that a holistic approach to budgeting, saving, and preparing for the future is as important to your ability to lead a healthy and productive life as a good diet, regular exercise, and sufficient sleep.

Experts say financial worries can be directly tied to a range of poor health outcomes including:

  • Sleep loss, anxiety, and depression
  • Immune and digestive systems problems
  • High blood pressure, muscle tension, and heart arrhythmia

Financial stress can also be related more insidiously to unhealthy coping mechanisms including:

  • Overeating
  • Lack of exercise
  • Smoking
  • Using alcohol and recreational drugs

These things can easily contribute to poor physical health and make your final situation even worse. For example, respondents told the PwC study that poor mental health as a result of financial issues directly affected their attendance, engagement, and productivity at work.

Fortunately, as the Bankrate survey showed, real improvements in financial wellness can also lead to measurable improvements in your physical health.

Just as taking steps to improve diet and exercise can have significant improvements in your overall physical, mental, and emotional health, taking a deliberate approach to your financial wellness can lead to a cycle of positive improvements in your quality of life.

What Are the First Steps to Financial Wellness?

There are many different approaches to ensuring financial wellness from financial literacy classes at educational institutions to programs offered by banks and non-profits. Almost all programs focus on:

  • Creating and following a realistic budget
  • Reducing debt and building savings
  • Planning for the future

At Jeanne D’Arc Credit Union, financial wellness is central to our efforts to empower the communities we serve with financial know-how.

We recognize the critical role local teachers play in promoting financial literacy and support them with many free programs. We also offer a range of services designed to allow our members to enjoy the benefits of taking control of their financial future. These include:

Click below to learn more about our commitment to financial wellness.

Financial Wellness