5 Ways Your Health Affects Your Finances

4 Ways Your Health Affects Your Finances

Updated on Nov 02 2018


Financial health and personal health are more connected than you may think. Wealthy people tend to be healthier people. The Journal of Psychological Science reports:

“Existing retirement-contribution patterns and future health improvements are highly correlated. Employees who save for their future by contributing to a 401(k) show improvements in their abnormal blood test results and health behaviors approximately 27% more often than non-contributers.”

It makes sense; people who save and take care of their health are high on the personality trait of conscientiousness. Being proactive about a healthy lifestyle produces a somewhat symbiotic relationship with personal finance as healthy people tend to be happier and economically more proactive.

Here are four ways your overall health and your finances are connected:

1. Mental Clarity and Decision-Making

When you take time to focus on your personal health by getting enough sleep, exercise and nutrition you’re more likely to make sound decisions. A healthy body and lifestyle makes you more capable; which leads to less stress and better planning. With organization and a healthy lifestyle comes mental clarity and decision making.

According to Salomon Israel, coauthor of a Duke study dicusses in a recent Forbes article that the correlation between good financial health and good personal health stems from a person’s personality traits and skills:

“It is not [necessarily] lack of exercise or poor diet, per se, that is leading to poor financial choices. Rather, a person who possesses the skills to better manage their health is more likely to possess the skills to better manage their finances.”

The same study found that low credit scores could be used to predict increased risk of cardiovascular disease. In order to be a future-minded person, the kind who contribute to their 401(k), it’s important to better manage your day-to-day so you can think about the future.

Good finances and healthy lifestyle are kind of like the chicken and the egg concept. When you’re body is properly rested and fueled, your focus and overall planning are better. The reality is that you have to take the time to get organized to succeed in just about every aspect of life, including your finances. Taking care of your health helps set you up for mental success and organizing immportant aspects of your life.

2. Longer, More Fulfilling Careers

When you’re healthy, you have the opportunity to work longer or even take on a second job after retirement. Many people age fifty and beyond realize that retirement today is not that of a generation ago. Gone are the days of company pension, company-paid health care and assured Social Security. Today seniors need to plan more effectively and consider that they’ll need more money to pay the costs of living that used to be covered by work or government programs.

According to a study from the Families and Work Institute, many people are working past age 65 and many seniors are staying in or are returning to the workforce because they “want to earn more money to retire more comfortably,” or because they believe they “would be bored not working.” The additional income will help not only build a bigger nest egg, but also provide some stimulating social interaction and new skills in the process.

Some Americans who are thinking about retirement but want to bring in some extra income take on a second, part-time job to help build a more solid financial future. Working longer is only possible if you’re healthy and able to do the work.

3. A Nutritious, Planned Diet (and Financial Plan)

Along with the sentiment that good financial planning and spending habits correlates with being conscientious; a nutritious, planned diet also reaps financial and health rewards. Basically, health eating impacts your body, and also your wallet. Think about it: Eating out at fast food restaurants is not only unhealthy, as most of the food is not organic and is high in fat, but is also expensive. According to USDA, a family of four eating moderately at home will spend about $245 per week on food, which is half of what they’d spend eat at restaurants.

In addition, high-fat restaurant meals may also affect cognitive abilities according to a recent Oxford University lab study. Jeff Reeves, author of “The Frugal Investor’s Guide to Finding Great Stocks” comments:

“There are a lot of parallels between good eating habits and good financial habits. If you don’t have the discipline to say no to junk food or coulnt calories, you probably make a lot of impulse buys and have trouble balancing your checkbook. Self-control is the key to good financial health, as well as a healthy diet.”

Planning your meals can help set you up for not only healthy nutrition success, but also healthy finance success. Healthy food and less expense means you can get the best of both worlds.

4. Exercise and Increased Energy for Healthy Body (and Finances)

Regular exercise results in more energy for your brain, which boosts cognitive ability and a better memory. This increased energy and blood flow help promote good decision-making to help you tackle finances in a proactive way. Not only that, exercising helps you connect with your body and can improve your confidence to better reach goals and minimize temptation. Marguerita Cheng, CFP® and CEO of Blue Ocean Global Wealth comments:

“Just as their may be stress-eating, there may be stress-spending. Exercise helps with this. Exercise can improve confidence, which can help people make more informed decisions and take the meaningufl actions necessary to reach their goals.”

In addition to helping you mentally engage to be more proactive with finances and plan for a successful financial future, regular exercising all promotes a healthy body that helps prevent illness and injury. When you’re healthy, you have less medical bills.

Healthy Life Promotes Wealthy Living

Planning to be healthy is very similar to planning to be wealthy as you have to be conscientous, smart and have incredible forethought to achieve goals. If you start planning to get eight hours of sleep a night, eat healthy, pre-planned meals and exercise on a regular basis, you’re setting yourself up for good health habits that also translate into the financial world.

Your financial future matters. Start planning today. Contact a financial advisor or fiduciary to start preparing for your retirement.

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