Financial Unwellness

“I’m a bit short this month.” “I’m barely getting by.” If these phrases sound familiar, you’re not alone. 72% of adults report feeling stressed about money at least some of the time, and financial problems are consistently rated among the highest sources of stress. If left unchecked, a high level of financial stress can lead to a wide range of emotional problems — and even physical conditions. Find out how you can develop a healthy relationship with money.

Man and woman stressing over bills

Financial unwellness is not only stressful, it can manifest itself in a number of ways, including:

  • High blood pressure or cardiovascular disease
  • Gastrointestinal distress, including ulcers or digestive tract problems
  • Sleep problems
  • Headaches or migraines
  • Depression or anxiety
  • Muscle tension or lower back pain
  • Relationship tension, which can lead to abusive relationships or divorce

A financial mindset

Before you stress just thinking about these potential health consequences, let’s work on shifting your mindset to improve your financial wellness. It’s well known that small, positive behavior changes make a big difference over time, and they’re always better than doing nothing at all. Just like someone who wants to lose weight starts by cutting 100 calories a day, a person who’s struggling financially can begin by saving five dollars a day. We’re much more likely to modify our behavior by taking small steps rather than trying to make large, immediate changes.

How to get on the right track

  • Do you maintain a budget and track your spending each month? Just like you would keep a food diary, write down all your revenue and expenses daily. Recording every single bit makes you mindful of how much money you have and prevents mindless spending. Every dollar counts and will add up over time!
  • Do you live below your means? Just because you can afford to buy something doesn’t mean you should. Spending less than you have will help you grow your savings.
  • Do you regularly put money towards an emergency fund? Start by putting aside a small amount every month. Knowing you have this money on hand in a true emergency will help ease your mind.
  • Do you make a strong effort to pay off credit card debt? If not, you should. A person who has a credit card balance of $5,000 (with an APR at the national average) and makes only the minimum payment each month will be paying off that debt for 24 years! Even worse, according to the Federal Reserve’s online repayment calculator, that’s more than $7,000 just in interest.
  • Do you contribute to a 401(k)? Who wouldn’t want to get free money (assuming your employer offers a match to your contribution) and a tax break? Since the money you contribute doesn't count toward your gross income for the year, your taxable income is lowered. And the sooner you start saving for retirement, the faster your account will grow. The reverse is also true — the longer you wait to get started, the more slowly your account will mature. Here's a hypothetical example:

Say you contributed $5,000 a year to a 401(k) for 10 years. Let’s assume that your investment earned 8% interest per year and all investment earnings were reinvested into your account. Depending on how old you were when you made those contributions, you would see very different amounts at age 65 when you retire:

  • If you started saving at age 25 and stopped at age 35, your account would be worth about $787,000.
  • If you started at age 35 and stopped at age 45, it would be worth about $364,000.
  • If you started at age 45 and stopped at age 55, its value would only be about $170,000.
  • And, if you waited to start saving until age 55 and contributed until age 65, you'd only accumulate about $78,000.

So, I encourage you to start healthier financial habits today, and do even one or two things that will help you to say:

“I have a little bit extra this month. I’ll make an extra payment toward my credit card debt.”

“All of my bills were paid on time this month, and I’m still able to treat my kids to a movie night!”