You do not have to be a psychology expert to know that finances affect people's feelings. Every person who has been through challenging financial situations knows first-hand how mentally draining being unable to pay bills can be.
This mental pressure, at some point, starts to manifest in a decline in a person's mental and physical health, leading to a vicious cycle of poor financial well-being and declining health. This guide looks into the interconnectedness of financial wellness and physical health and what you can do to maintain this balance.
What Is Financial Well-Being?
Financial well-being is a holistic term that refers to a person's relationship with money and how it impacts their life. While earnings are a critical part of it, they are not everything. It also encompasses how a person thinks and manages their finances.
Achieving financial well-being thus means you are not constantly worrying about money but have a clear understanding of how much is coming in and a definite plan for your expenditures and savings.
Effect of Financial Wellness on Mental Health
Before financial issues impact your physical health, they will affect your mental health. According to experts, money-related stress tends to be chronic and are the leading stressors for most people.
The opposite is also true. Achieving financial wellness means you feel more in control of your life and have little to no stress around money issues. It also means having a positive outlook on life, creating a vicious cycle of excellent decision-making and better financial health.
Effect of Financial Wellness on Physical Health
Higher levels of financial stress will ultimately manifest in poor physical health. It contributes to poor health in two ways: the body gives in to mental stress, and lack of access to medical services due to financial challenges contributes to deteriorating health.
Medical conditions that could result from too much mental pressure include headaches and migraines, high blood pressure, digestive issues, insomnia, heart arrhythmia, and a weakened immune system.
It can also lead to lifestyle conditions linked to poor coping habits. For example, stress can lead to drug use or alcohol abuse, which ultimately leads to poor health. The opposite is also true.
The positive outlook in life a person has when in a state of financial wellness triggers the release of feel-good hormones, which contribute positively towards good health. It also means they can access health services when needed.
How to Improve Your Financial Wellness
The road to financial wellness is not straight for people building their wealth from the bottom up. So there, you can expect to go through seasons where your finances are on the rocks. You can take several steps to improve your financial wellness in such a situation such as:
Leverage Tax Breaks
You can explore the many tax breaks extended by the federal government to save some dollars. These savings can go a long way when you look at them in the long run.
You can even explore tax benefits that have a direct positive impact on health. For example, supplements, exercise, and supplements offered by TrueMed can count as HSA and FSA spending, which is tax-deductible.
Get Financially Literate
Financial wellness is not about how much a person makes. It is about how they handle and manage the little or the much they have, so if you have major issues with money management, it may be time for you to take financial literacy classes.
Spending money on financial literacy in a financial crisis can feel like the antithesis of your goal. However, you will discover with time that it is the best thing you can do for yourself as it can help solve a chronic problem. It stays with you for the rest of your life.
You and your closest ones need money to satisfy your needs and enjoy a comfortable day-to-day life. After all, one always needs funds to be able to travel, buy a new house or car, or pay for medical treatments.
Unfortunately, achieving financial well-being is not always so easy. The economy is unpredictable, jobs are not always reliable, and emergencies can happen anytime.
That’s why it’s essential to plan and be prepared for the worst.
This article outlines a few ways to boost your family’s financial well-being. Read on and learn how to ensure your family has what it needs to maintain a happy and stress-free life!
Research Loans Before You Take Them
Loans are a common financial resource people use to buy expensive goods or pay for repairs. The unfortunate reality is that most families can’t afford to pay for everything just with cash. And unless you have a lot of savings or receive a hefty sum from an inheritance, you will almost certainly need to take a loan at some point.
Yet, before you sign on the dotted line, it is wise to do your research. Whether you are looking for title loans or a typical bank loan, you need to consider a lot of things. Typing “title loans near me” in the web browser and clicking on the first result is rarely the best course of action.
First, you should decide on the type of rate you want — variable or fixed. Variable rates may seem ideal — the rate is usually quite low and can stay that way for a long time with the right economic conditions.
However, the rate will increase if the economy starts to go downhill. As such, a fixed rate might be a more sensible option for your family’s financial stability. Your rate will be higher but won’t increase, no matter what economic situation your country is in.
Next, you need to consider the type of loan you want. Again, you have two alternatives: an unsecured or secured loan.
Secured loans are easier to obtain and have less stringent requirements. In return, you put your house, car, or another asset as collateral. You might lose that asset if you don’t make your payments on time.
Unsecured loans, on the other hand, are harder to obtain. At the same time, they don’t put any of your assets at risk.
If you are unsure about what sort of loan will impact the financial well-being of your family the least, try reaching out to a financial advisor and ask for their opinion and advice.
Use Extra Money To Pay Off Debts Faster
Receiving a windfall from an inheritance, a bonus at work, or selling some old possessions can be an excellent opportunity to pay off some of your debts. Doing so will free up more money for other things and reduce the financial burden on your family.
Paying off high-interest debts first always makes sense, but you must also consider the alternatives. For example, if a debt is close to being written off, you might be better off using your extra money to pay for other expenses.
If you don’t have any obligations, you can use your windfall to build an emergency fund. It is a good idea because it will help you pay for unexpected expenses without taking out a loan or using your savings.
Does your partner need costly medical treatment? Or perhaps your home needs urgent repairs? An emergency fund will help you cover all that — hopefully without putting a financial strain on your family.
Invest in Your Education and Skills
The easiest way to safeguard the financial well-being of your family is to find a well-paid job. Nevertheless, this is not always possible.
Even if you work harder than most, you might never be able to earn enough to provide a comfortable life for your family. To make things worse, any recession or economic downturn can further reduce your income and make it almost impossible to cover your family’s needs.
One way to stay ahead of the curve is to invest in your education and abilities. By becoming more qualified and acquiring new skills, you will be able to find a better job and earn more money. This move will also make it easier for you to change occupations or industries if something bad happens.
There are countless education options out there, from online courses and university degrees to night classes and professional development courses. It’s essential to choose an option that will help you further your career and allow you to earn a higher income.
You might also look at ways to turn your skill-based hobbies into an additional source of income. Maybe you love to create digital art or make homemade jewelry. Why not try selling your creations online?
Or perhaps you have a solid understanding of some subject and can offer your skills as a tutor or consultant? There are endless opportunities out there if you just look for them.
Be Conscious of Your Spending
One of the most significant problems with money is that it can be all too easy to spend without thinking much. If you are careless, your spending habits can quickly put a financial strain on your family’s economic well-being. And in an emergency, they might even put your whole family at risk.
To prevent this from happening, you must be conscious of your spending and try to save money whenever possible. One easy way to do this is to set a budget and stick to it. It will help you see where you can cut corners and what sort of things you shouldn’t spend your money on.
Of course, this might be easier said than done, but it’s important to try.
Also, discuss the matter with the rest of your family. If everyone is on the same page and agrees to limit their expenses on non-essential items, staying within your budget will be much more manageable.
The Bottom Line
Maintaining good financial well-being is critical for any family. After all, nobody wants to live in poverty or economic instability. However, achieving good financial health can be challenging.
Besides carefully considering all the factors involved in taking a loan, you might want to invest in your skills and abilities to get better job prospects and use any windfall to settle your debts and improve financial stability.
Moreover, be careful when spending money. Set a budget, and try to stay within its limits.
The most important thing is to plan and be prepared for any eventuality. One cannot achieve financial stability overnight — it takes time, effort, and patience. Nevertheless, your family will soon enjoy a better situation if you continue working on attaining your financial goals.
