Are Your Finances Taking a Toll on Your Health?

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Are Your Finances Taking a Toll on Your Health?

Pandemic exposes direct connection between financial wellness and your physical and mental health

By Cullen Koger

It doesn’t matter the size of your bank account, what’s in your wallet or the number of Mason jars you have buried in your backyard. Money, by its very nature, causes stress.

Like it or not, your money and your health are intrinsically connected. While money can’t necessarily buy you happiness, effectively and honestly managing your household economics is paramount to your overall well-being.

For some people, their sense of personal worth is directly linked to their net worth. For others, it’s a source of conflict among family members. And still others have anxiety about handling their own finances and want to avoid the responsibility altogether.

“We know there’s a direct correlation between financial wellness and physical health,” said Alonzo Nieva, retirement plan education consultant with BOK Financial. “If you have financial difficulties or trouble managing your money, it can lead to feeling defeated, which may lead to physical issues like poor eating habits, taking up smoking and sleep disorders.”

According to Nieva, it comes down to improving your attitude, making a plan and sticking to it.

“If you have a positive outlook and are happy, you’re naturally motivated to do more,” he said. “So, having the right attitude can help you improve your financial situation, which, in turn, helps improve your health.”

As with most things financial, planning is key. Get your thoughts about your personal finances out of your head and down on paper. It’s a great place to start your journey to financial freedom—and freedom from stress and anxiety.

Understanding your finances in black and white makes you less emotional about money, and that tends to make you more pragmatic about how you spend and save it.

“That’s where we come in to help our customers,” Nieva said. “We help provide education and the tools people need to build a plan.” Real-world examples of how others have achieved similar goals help people relate those decisions to their own situation, he said.

The psychology behind needs versus wants has become significantly more amplified during the pandemic. We have basic needs such as food, shelter and clothing. We have to pay our bills and meet our other financial obligations, like loans. Then there are the wants—the extras that we feel make our lives better and fuller.

In times of crisis, people sometimes jump straight to the wants, Nieva said.

“I recently spoke with a neighbor who got laid off,” said Nieva. “He was standing in his backyard with brand new lawn furniture. Instead of saving money in a time of uncertainty, his rationale was that he was going to do something for himself after being let go. That was an emotional decision.”

“Impulse buying is ultimately irrational, which can lead to feelings of regret later,” he added. “That becomes stress and all the problems that come with it.”

Crisis or not, we often spend money to live up to a particular standard. There’s stress and emotion that comes with maintaining an external perception to the world.

During the 2008 economic downturn, BOK Financial specialists noticed something for the first time in a recession: people kept spending money.

“Traditionally, people dial back their discretionary spending during challenging times by swapping for lower-cost substitutes,” said Chrisanna Elser, financial planning quality assurance specialist with BOK Financial.

“In this particular pandemic crisis—just like the 2008 downturn—once panic purchases subsided and basic needs were met, people moved into protective mode,” Elser continued. “They were making moves to let the people around them know they were going to weather this storm just fine.”

Online shopping and quick delivery certainly helped people get through the shelter-in-place phase of the pandemic, but it may have also encouraged people to spend recklessly, Elser said. “It feeds our need to buy things with just a click of a button. And that can cause problems down the road.”

When you have to physically hand over your hard-earned money, you don’t part with it as lightly, Elser added.   

Fortunately, the pandemic has also made people think more about budgeting their money for financial wellness.

“This crisis has allowed people to slow down and fill their time with things that are the most important to them,” said LeeAnn Motley, financial planner at BOK Financial. “It’s allowed us to hit the reset button.”

“Many are focusing on their health more, including exercising and eating better, creating working-from-home routines that provide better balance,” Motley added. “They’re building budgets and utilizing savings and investing tools to stay the course. Feeling confident about your financial situation gives you confidence in other aspects of your life.”

The pandemic has also made it easier for people to open up about financial challenges in ways that were once considered taboo. 

While we actively guard our image in public, privately we share, Nieva said. “This is actually a great time to talk to friends and family, and to ask questions about finances. There’s a new willingness for dialogue.

“Hopefully, communicating with others will break down those barriers that keep us from talking honestly about money, so we can all have a healthier outlook, not just on money but life in general.”

 

Additional Disclosure:

The opinions expressed herein reflect the judgment of the author(s) at this date, are subject to change without notice, and are not a complete analysis of any sector, industry, or security. The content provided herein does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations. Recipients should not rely on this material in making any future investment decision. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, you are encouraged to consult with a qualified lawyer, accountant, or financial professional.

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BOK Financial Corporation (BOKF) offers wealth management and trust services through various affiliate companies and non-bank subsidiaries including advisory services offered by BOKF, NA and its subsidiaries BOK Financial Asset Management, Inc. and Cavanal Hill Investment Management, Inc. each an SEC registered investment adviser. BOKF offers additional investment services and products through its subsidiary BOK Financial Securities, Inc., a broker/dealer, member FINRA/SIPC, and an SEC registered investment adviser and BOK Financial Private Wealth, Inc., also an SEC registered investment adviser.

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