Your Monthy Financial Update

Is Financial Stress Making You Sick? 

Prepared by MetLife

Delivered courtesy of  Enrico Fioranelli and Scott Russell,

MetLife

Like many people, you probably made a New Years Resolution that this is the year you will get healthier – perhaps by losing weight, eating better, stopping smoking or adding some regular exercise into your life.  But did you include financial wellness in your fitness plan?

Did you know that in addition to keeping you awake at night, financial stress and worry can also actually make you sick?  

Studies have shown that people dealing with financial stress are more likely to suffer from high blood pressure, severe depression, back pain, headaches, digestive problems, and heart attacks; situations that can keep you off work, at the doctors and add to financial pressures.[i] In addition, having financial worries on your mind can affect your job performance – distracting your focus and preventing you from doing your best.

Given the recession and the sluggish economic recovery it is not surprising that more of us than ever are concerned about our financial security, whether because of declining home values, mounting credit card debt, saving for college and retirement or simply meeting everyday household expenses.  A MetLife study found that 43% percent of employees say they have trouble paying bills and 71% worry about having enough money to make ends meet.[ii]

So achieving good general health means not only working on your physical health but also on your financial health. Here are some steps you can take to improve your financial wellness:

Step 1, Get Started

Reviewing financial matters can seem overwhelming, and given the pressure and pace of modern life, it is all too easy to put off tackling the job –especially if you suspect that you are not going to like what you find.  How do you get started?  In the same way doctors often recommend having a physical checkup before you begin an exercise program, so doing an assessment of your financial vital signs is the first step on the road to financial wellness. And if need be, seek out a financial professional to help you.

Only you can decide what’s important to you - whether it is saving for college, paying down debt, or buying a home, and of course preparing for retirement.  Having clear goals will help you gauge your progress and clarify the necessary choices and priorities to achieving them.  Putting these goals on paper may also encourage you to stay on track.

Step 2,  Get Smart

When people make poor financial choices it’s often because they don’t have the knowledge and information to make better ones; nearly one in two employees report that they do not currently consult with anyone regarding personal financial matters[iii]. Getting to your goals is going to need a strategy; and most of us benefit from some help with this. 

As a starting point, you may want to turn to your place of work as one of the access points to financial education and guidance. Many employers now make financial education available to employees on a variety of topics ranging from basic financial literacy to retirement planning. This can take the form of seminars that you can attend at work, or online webinars that you can conveniently access on your own time, as well as online tools and calculators that can help you make smarter personal financial decisions.

If you are looking for more face-to-face professional guidance and advice, you may want to seek out a financial professional to answer your questions and help you through the process of getting your financial house in order. Organizations like the Financial Planning Association, Certified Financial Planner Board of Standards, Inc., and LIMRA, to name a few, can help. You may also want to seek recommendations from colleagues, friends and family.

Step 3, Get Saving

Not tomorrow, not when you hit some magic milestone, but now.  This is job one!  Even if the amount that you will need to save for putting your kids through college or your retirement income seems insurmountable, don’t let yourself think there is no point in even trying.  Instead, in the same way that physical health involves building a healthy body with regular exercise, so financial wellness requires a commitment to a regular savings habit.

Having a savings plan does not mean hoping there will be something left at the end of the month to put away.  If you are like most people that will be much less than you need.  Instead make saving easy and automatic by having a regular amount deducted by your employer from each paycheck and put into a savings program before you can spend it. You won’t miss what you don’t see and will be surprised how even a small amount saved from each paycheck can turn into a healthy financial cushion.

If you receive a raise, or find yourself with a little more free money such as when a car loan gets paid off, consider increasing your savings amount before you increase your spending levels.

It goes without saying that you should be making the most of any tax free savings opportunities available through your workplace.  Many employers offer to match a portion of your savings. Not taking advantage of these programs is like turning your back on FREE money. 

Step 4. Get Protected

Most working Americans rely on their income to cover essential living expenses for themselves and their dependents. But have you thought about what would happen if that income is interrupted by a long-term illness or injury or even premature death?

Many workers say that they are very concerned about these possibilities, and yet many have not taken steps to protect themselves or their families against these risks[iv].  Don’t assume that your medical insurance or Government disability programs will fill the gap.

Reduce unnecessary anxiety. Make it part of your financial check-up to calculate how much life insurance and disability income protection coverage you would need to replace your income. Do you currently have enough coverage to maintain your or your family’s lifestyle?  

Compare the relatively small outlay for income protection insurance, with the potential financial and emotional costs of NOT having coverage. Take advantage of your workplace benefits, and if additional protection is needed, consider supplementing this coverage with an individual policy obtained on your own.

No one likes to think of these unpleasant subjects but knowing your loved ones will be taken care of if anything happens to you or your ability to earn a paycheck will put you on the path to peace of mind.

Rewiring bad habits is not easy and takes repeated reinforcement – as everyone who has ever tried to give up smoking or lose weight can attest!  But working on your financial fitness by taking the above steps can have a big payoff in reduced stress and improved general health. Add financial wellness to your health goals today.

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[i] AP-AOL Health Poll- Debt Stress: The Toll Owing Money Takes on the Body, 2008

[ii]  9th Annual MetLife Study of Employee Benefits Trends        

[iii]  9th Annual MetLife Study of Employee Benefits Trends

[iv] 9th Annual MetLife Study of Employee Benefits Trends