We often seek professional help when it comes to maintaining our physical and mental health, but why not our financial health?
You would never neglect a tooth ache or ignore a broken bone, but people often overlook saving for the future, paying down debt and establishing goals for retirement.
“Research shows there’s a clear link between your financial health and your mental health and your debt may serve as a tangible representation of your psychological state.” (source: What Your Financial Health Says About Your Mental Health, Psychology Today, Amy Morin.)
Even if we do not think about our financial situation on a day-to-day basis it is usually in the back of our minds. It often becomes relevant when we go to make a large purchase, pay an outstanding bill, or are confronted with an unexpected expense. Our finances often dictate our ability to experience certain things. We make decisions based on whether or not we can afford to do so.
“Researchers from the University of South Hampton examined 65 studies on debt and mental health. Their report, which was published in Clinical Psychology Review, found a correlation between mental illness and financial problems.
Researchers concluded the likelihood of having a mental health problem is three times higher among people who have debt. Depression, anxiety disorders and psychotic disorders were among the common mental illnesses people in debt experienced.” (source: What Your Financial Health Says About Your Mental Health, Psychology Today, Amy Morin.)
Worrying about your finances causes stress. Stress is bad for your health. It can then be inferred that taking the steps to manage your finances will reduce your stress and improve your mental health.
“The implication here is not simply that poor financial health may lead to poor mental health. Much more important is the logical inverse: that taking active steps to ensure our financial health is very likely to pay positive dividends on our mental health as well.” (source: Financial stress leads to symptoms of depression, PTSD, Money Management International, Jesse Campbell)
So, what can you do?
Just like eating well, exercising and seeing a healthcare practitioner can help maintain your physical health, you can take active steps to improve your financial health. Now might be the time to perform a financial check-up.
1. Gather all of your relevant “financial documents” in one place.
This includes:
PaystubsBank statementsTax returnsCRA Notice of AssessmentsCredit card statementsInvestment statementsStatements of liability (lines of credit, car payments, mortgages, student loans)
2. Establish your financial objectives
What goals are important to you?
Paying off debt?Reducing taxes?Buying/Renovating a house?Saving for your education or your children’s education?Ensuring protection from the unexpected?Maximizing the growth of your savings?Transferring your wealth after death?Retiring when you want to, and comfortably?Ensuring your funds last through retirement?Making a career change?
3. Create reasonable, measurable steps to help you achieve these goals
4. Talk to a Financial Advisor they can help you fully comprehend your financial situation and empower you to take steps to ensure your finances are “healthy.”
When you no longer have the stress of poor financial health, you can focus your time and energy on more important things - like fully experiencing life. If you would like to chat about your financial and life goals please get in touch!
Brooklyn Scott is a Financial Advisor/Mutual Funds Representative for Lewis & Jones Group/Desjardins Financial Group/Desjardins Financial Security Investments Inc. in Killarney, Manitoba.
Mutual funds are distributed through Desjardins Financial Security Investments Inc. For insurance products, Desjardins Financial Security Investments Inc. acts as a national insurance brokerage agency.