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We often focus on the money-related benefits of financial planning. Putting together a road map for your finances can improve your money management skills and help you reach goals like paying off debt or saving for retirement. It makes sense to think in terms of these financial benefits, given that a large part of financial planning is about helping you create the future you want for yourself.
But did you know that having a strong financial plan can also be beneficial to your health? When you’re in control of your finances, you tend to experience less stress, feel more confident and sleep better. Let’s take a closer look at some of these potential benefits.
If you’ve ever felt anxious about money, you’re not alone—64% of those surveyed by the American Psychological Association said that money is a significant source of personal stress.1
Research has found that money-related worries can negatively affect your health both physically and psychologically. Financial challenges—be they job loss, cash flow problems or retirement insecurity—often cause a great deal of stress and anxiety, which has been linked to a number of health issues, including migraines, backaches, high blood pressure and depression. Over time, these health problems could create even more money troubles.
When we think about ways to manage stress and lower anxiety, we tend to think about exercising, eating healthy, meditating or checking in with a doctor—the physical things we could do to help ourselves. Financial planning is probably not something that comes to mind as readily, but good money management could help squash financial worries and yield a number of health benefits too.
Almost everyone has felt stressed and anxious about their finances at some point. Before you start planning, you need to pinpoint the main sources of your financial stress. Once you are able to identify the causes, a personalized financial plan can help you tackle those issues one by one. If you have access to Ayco through your employer, work with an Ayco coach to explore ways to get your finances in order.
Breaking your financial planning into small, manageable steps can help ease your money-related stress. For instance, if you’re struggling with debt, work with a coach to come up with a debt management plan, including a review of your spending and saving, to take back control. If you often find yourself wishing you could put more money into your retirement account or your kids’ 529 plans, your coach can work with you to analyze your monthly budget and look for ways to shift more money toward these goals.
Having a financial plan that addresses your specific money concerns can help you regain a sense of control over your financial future, alleviating some of the anxiety you may have.
Not only can a well-thought-out financial plan provide you with a road map toward achieving your goals, but it can also give you the confidence you need to make those important—sometimes difficult—money decisions so you have a better chance of reaching your goals.
And when you’re confident in your ability to manage your money, you’re also in a better position to respond to any financial setbacks head-on. That sense of confidence can also help boost your self-esteem. Feeling good about yourself and the general direction of your life can positively impact your mood, resiliency and relationships with others—in other words, your overall quality of life.
According to The Better Sleep Council, personal finance is one of the top factors that can hurt your quality of sleep.2 It can be hard to turn off your thoughts if worries about market volatility or paying down debt are constantly on your mind.
So how can financial planning help you get some shut-eye?
Creating a financial plan can help you identify and understand the fears and insecurities that are keeping you up at night. When you’re able to get those money worries out of your head and down on paper, you can begin to put together a personalized plan to tackle them. Knowing that you’re taking proactive steps to address your concerns can give you the peace of mind you need to get some restorative sleep.
Money is a significant source of stress for some couples, and when financial problems are left to fester, they can seriously strain your relationship with your partner. In fact, fights over money are a leading cause of divorce. But just as with other types of relationship problems, this is something you and your partner can work together to address.
When it comes to love and money, communication is key. It’s important to have honest conversations about your finances and how you’re going to manage your money together.
To be sure, conversations about money can be difficult for some people, so it might be worthwhile to bring in a financial planner, who could mediate potentially difficult discussions. For instance, if money matters are a constant source of conflict, what are the causes? What are the areas of agreements and disagreements?
The point of having these conversations with a professional advisor is to help get both you and your partner on the same page financially, which could reduce the tension in your relationship and foster a mutual sense of financial security and stability.
Strong financial planning can help you take control of your life through better money management and put you on a path toward creating the future you want. Don’t have a plan? Don’t worry—it’s never too late to start the conversation with a professional financial advisor.
Remember: In addition to helping you get a handle on your money, a financial plan can also bring certain physical and mental health benefits, including less anxiety, better self-esteem, improved sleep and stronger relationships—all of which could help you develop a more optimistic outlook on life and feel good about the direction you’re headed in.
If you have Ayco as a company benefit, register or log in to learn more about this and other financial wellness topics.
This article was originally published on marcus.com.
For disclosures relating to this article, please click here.
Updated for tax year 2020
Updated for tax year 2019