Why money is important for your wellness
As a society we are becoming more and more focussed on wellness and wellbeing. The wellbeing movement has grown to epic proportions around the world. The most recent statistics I could find from 2019 put the value of the wellness industry at over USD$4.5 trillion (with a ‘t’!) and no doubt the industry has grown significantly larger since then.
I’ve spent a lot of time thinking about what makes up true wellbeing, and have found there are three critical elements, being physical, mental, and financial. I’ve found that if any of these areas are lacking, total wellbeing cannot be achieved.
If you have physical health and money but lack mental wellbeing, you’re in trouble. If you have mental health and money but are unhealthy, again trouble. And physical and mental health without financial security isn’t much fun either. Eventually the one area that’s lacking will impact on one or both of the other areas, wellness levels deteriorate and your quality of life reduces.
These apply at least for western cultures. I know there are a bunch of statistics that show there are some areas in eastern and developing countries where people don’t have money and still have high levels of happiness and wellbeing. But for people living in western cultures, without enough money for an iPhone, Netflix subscription, and smashed avo at your favourite brunch spot, it’s hard to maintain your happiness and sanity.
I’m not saying you need to be at a spartan level of health, or the Dalai Lama’s level of happiness, or have the money of Warren Buffett or Oprah Winfrey to be considered ‘well’ in any of the three elements. But you need a base level.
I’m a financial adviser so I’m not going to pretend to be an expert in physical or mental health. But I know from my personal experience that your physical health impacts all areas of your life. Your ability to work productively and make money and progress your career, as well as your ability to maintain good relationships with the people you care about.
Your mental and emotional health impacts you in the same way. I’m a huge fan of mindfulness and meditation and I’ve found that focusing on my mental and emotional wellbeing has had a huge positive impact on my personal life and overall wellbeing levels.
But from my professional experience helping people with money, I’ve found financial wellbeing has a huge impact on stress and mental health levels. If you’re struggling financially, it can impact your work performance, career progression, relationships, mental, and even physical health.
While there is more focus, and more money being spent on wellbeing today than ever in the past, I think it’s fair to say our wellbeing levels are probably at an all time low. Obesity and other lifestyle diseases are at an all time high. I’ve seen through the personal insurance work I do with my clients the incidence of mental health issues is increasing, with higher reported levels of stress, anxiety and depression than I’ve ever seen in the past. And the statistics show financial wellbeing is suffering.
The statistics
The Australian Psychological Society report on Stress and Wellbeing shows money is the leading cause of stress for Aussies, with this being most prevalent for people aged between 25-44. The report shows money as the leading cause of stress across the country. But for people 25-44 the report found over 50% of this group report money related stress.
Financial problems and stress further impacts the ability to perform at work. Recent research from AMP shows “employees who suffer from financial stress are less engaged at work and more likely to underperform”. The cost of this underperformance can be significant for employees and employers.
Money stress can lead to a decline in career progression, and in extreme cases even unemployment. For employers the cost is also high, with stats from the AMP report putting the cost of lost productivity due to financial stress at over $47.2 billion annually.
Urgent vs. important
So why is this happening? With more focus and more money being spent on wellbeing, we should be healthier, wealthier, and happier right?
I’ve found the one reason most people don’t make good financial choices is the same reason they don’t make the right choices for their physical and mental wellbeing.
It goes back to a flaw that has been impacting humankind for centuries, the battle between the urgent vs important. This is our tendency to focus on things that are (or seem) urgent instead of the things that are important but don’t seem urgent.
Things that are truly important are rarely urgent. Your physical health, mental wellbeing, and financial health fall into this category. Other important areas that land here are your personal relationships and career or professional development. These areas of your life are never really urgent in the moment - until they are, and by that time you’re in crisis and it’s way harder to get them back on track.
Everyone knows all these areas are important. But, in the moment it’s easy to fall into the trap of answering emails, hitting the couch after a hard day at work, or binge watching cat videos on youtube. But fall into this trap and you’re effectively prioritising the ‘urgent’ but not important, and over time the things that are truly important for long term happiness will suffer.
Financial confidence and wellbeing
One of the keys to money success (and money wellbeing) is having a clear and easy to follow plan that can take you from where you are today to the money and lifestyle outcomes you want. But beyond the plan itself you want to use education to build true and complete confidence in the strategy and the direction you’re taking.
The plan itself is important, because it has the ‘nuts and bolts’ of the strategy. But it’s the confidence and peace of mind which is all important for true financial wellbeing.
I’ve found that when someone has confidence and peace of mind around the strategy they’re following with their money, there are some key benefits.
You know there’s not something better you can or should be doing with your money. You also know risk is managed in your money strategy, which gives you the ‘sleep at night’ factor. You know exactly what you’re doing right now, and what your next step is going to be.
This adds together to deliver real peace of mind and confidence. This also allows you to avoid the distractions that so often lead people to financial setbacks and mistakes. Often these come from hearing stories about some foolproof financial strategy or investment that will help you get ahead faster or easier (or both).
When you achieve financial wellness, all other areas of life improve. It sounds strange, but I’ve seen this time and again when working with my clients. Relationships improve. Work performance improves which leads to career progression and further financial benefits.
And importantly once you know your money is sorted you can get on with the things you really enjoy and care about.
So what should you do?
Success in these areas and overall wellbeing won’t just magically come together by itself. If you want to achieve real wellbeing you need to prioritise your success.
Like anything important, the first step is always the hardest. But once you take that step, you can get epic results by simply making small but consistent improvements over time. The best time to get started was 10 years ago. But the second best time is today.
Take a stocktake of where you’re at now in the three essential elements of wellbeing. NOTE: If you’re really struggling in any of the areas, you should focus all the attention and spare time you have on getting that area back on track.
But assuming you’re doing at least ok in each of the areas, I’ve found the best way to take your wellbeing to the next level is to commit to making one small improvement in each area each and every month. It could be improving your diet or taking a short walk a few times a week to improve your physical health. Or spending five minutes a day doing mindfulness exercises, or working on your relationships to improve your mental health. Or maybe doing a budget or checking in on your finances to improve your financial wellness.
The key here is consistent positive action. I’ve seen this work over and again with the people I work with, both on the financial side of things as well as in the other areas of their lives.
The benefits of total wellness are worth it. So make it happen and your future self will thank you for it.
This article was written by Ben Nash, a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth, and Author of the Amazon Best Selling Book ‘Get Unstuck’.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.