How financial wellness affects overall health
A study in 1981 determined that satisfaction with various aspects of life led to an overall feeling of psychological well-being. One of those aspects involved an individual’s financial situation. As might be expected a further study in 1993 by Walson and Fitzsimmons found that subjective judgments about an individual’s satisfaction with their resources and level of living were important predictors of perceived economic well-being. A later study in 2004 indicated that levels of financial stress and risk tolerance were related to financial satisfaction. Probably the most visible construct of all these studies is the effort to put a value to consumer confidence.
All this is to say that a significant number of studies have indicated that if individuals felt that they were under economic distress it was a good predictor of lower levels of well-being. Not exactly earth shattering news since most of us probably already “knew” this without the benefit of a study.
Nor is it shocking to discover that two people making the exact same amount of money can feel vastly different about their economic situation. During the same time-frame large segments of so-called First World Countries are experiencing shocking problems with obesity while simultaneously experiencing fiscal obesity, Chinese and Indian households have experienced higher levels of savings and a more positive outlook on retirement according to The MetLife Study of Financial Wellness Across the Globe (2011).
While it’s true that financial issues can seriously impact health issues, the reverse is also true. Health issues can have serious economic impacts. On the world stage, the ramifications for countries is that one major health problem can cost a country billions of dollars in health costs and lost productivity whereas a reduction in a common health problem leads to trillions of dollars in economic benefits according to economists Murphy and Topel (2003).
How do we stop this merry-go-round before we all fall off? One suggestion is to hire someone who can help you make solid financial decisions. The MetLife study reported that the majority of people simply don’t have the financial literacy necessary to make solid financial decisions. The outcome is that even though a majority of people agree that the government will not be able to provide sufficient retirement funds “only 38 percent are saving for old age, only 50 percent have some kind of financial plan in place, and nearly one in five do not know what will constitute their income in retirement.” By either hiring someone or putting in the sweat-equity to understand your financial future, you’ll ultimately build a more solid financial footing for your retirement and thus increase your own confidence and well-being about the future.