I’m writing this blog post about financial wellness during one of the most tumultuous periods of our lives. COVID-19 has upended to our economy, our livelihoods, and our engagement with community. We’ve all had to adjust to a new reality, one that is hopefully temporary but also one without a clear end-date.
To round out my current scene — I’m sitting at a foldable card table, adorned with a snowman-covered tablecloth, all the while locked in a makeshift bedroom “office.” I imagine your current working environment is no less, well, divergent from the norm.
Regardless of location or situation, we have all had to carry physical, mental, and financial crosses during the COVID-19 pandemic. And while the story is not yet over, I wanted to address how to best identify and improve your view of your own finances. The numbers and impact of financial stressors on other aspects of your life, discussed below in more detail, are quite staggering.
But the problems can be identified, addressed, and in some cases, resolved. So let’s discuss how financial wellness affects your physical, mental, and emotional health, and how approaching your finances with a clear, accepting, and dispassionate view can improve other aspects of your life.
Financial Wellness and Mental Health
Financial issues play against the mind not like a sharp tack through the foot but like an albatross around the neck. Their constant hum can feel inescapable, and this sadly manifests itself through demonstrably higher levels of depression and anxiety.
One study found that 23 percent of those with debt report having severe depression compared to 4 percent without. Another study saw a 14 percent increase in depression symptoms with every ten percent increase in personal debt. Additionally, 29 percent of those with debt suffer from severe anxiety relative to just 4 percent without.
How can one try to improve mental health through financial wellness?
The first step is to take small steps. No one can do a 180 on their financial situation overnight. But by surveying your financial landscape and developing actionable, bite-sized goals, you can incrementally improve what is right in front of you.
Need help understanding where to start? A financial advisor or credit counselor can help point you in the right direction. Together, you can assess your situation, figure out your needs, goals, and values, and build a plan that works for you.
Of course, prolonged symptoms of depression may require more than just self-help. If you find you are unable to bring yourself out of a period of sustained sadness or loss of interest, please reach out to a mental health professional.
Financial Wellness and Emotional Health
While they are intertwined, there are differences between mental and emotional health, particularly around how you interact and identify with your finances. For the purposes of this post, we will identify mental health as your mind’s processing power while emotional health is how you respond and express feelings to the information you process.
Your emotional health is undoubtedly affected by your finances. Surprisingly, it’s also affected by the finances of your friends and neighbors. A Canadian study found that the neighbors of lottery winners were more likely to incur debt and file for bankruptcy. In another study, the more your neighbors earned, the less happy people tended to be.
Feelings of inferiority, feelings of shame, and high-risk, self-sabotaging behavior — these are examples of how your relationship with money can affect your emotional health.
We don’t need to keep up with the proverbial Joneses in order to ease our emotional well-being. An important distinction is to understand that money can be a proxy for another, underlying issue. Does your inability to buy a new car or house or boat really mean that your finances aren’t in order?
A better exercise is to compare yourself to… yourself. Where were you five or ten years ago? How does that compare to where you are today? You’ve likely made significant, meaningful, and fulfilling changes to your life. You are on a great path — keep going and don’t glance out the window at the cars in the other lanes!
Of course, this sort of self-identification isn’t easy, nor is it the only route. Speaking with family and friends about what money means to you emotionally can have a twofold benefit: you’re able to get out of your own head and get different, insightful perspectives on the problem.
Financial Wellness and Physical Health
Nagging financial issues can plague the mind, but they may also snowball into deleterious physical ailments. A 2013 study found that young adults with high debt suffered from higher diastolic blood pressure than those without high debt loads. And this was for a cohort who typically suffered less from high blood pressure than other age groups.
Further, 27 percent of those with high debt reported having ulcers or other digestive tract problems, versus 8 percent for those without. And 44 percent suffered from migraines or other headaches, versus just 15 percent without. We have clear-cut evidence that financial stressors depress immune responses and exacerbate the effects of illnesses.
But you can implement countervailing strategies. Proper nutrition, adequate sleep, and consistent exercise can help. A simple prescription, sure, but all three truly check the boxes to help allay the chronic effects of stress, financial or otherwise. Additionally, mindfulness exercises like yoga, meditation, or journaling also provide an outlet to meld mental exercise with physical.
Financial Wellness with Harbor Crest Wealth Advisors
We all are doing the best we can amid a difficult time in the world. Tending to our own financial health while triaging our businesses and income and supporting our families and friends is, quite simply, too much to manage. But you don’t have to go at this alone, and we have resources that can help you manage. Try taking our assessment on how your behaviors might impact your overall financial goals.