- When you’re struggling to get through the day, it can be difficult to plan for your financial future.
- Here, financial experts say how stress is affecting workers and what you can do about it.
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Workers’ biggest economic concern is still keeping up with rising costs, more than a year after inflation hit a 40-year high, according to a new report from Telus Health. It is said that there is.
According to the health technology services company, these money worries may be related to mental health.
“There is a lot of conversation about mental health right now, and rightly so,” said Paula Allen, global leader of research and customer insights at Telus Health.
“But it’s really impossible to develop a good mental health strategy without seriously thinking about your financial well-being,” Allen says.
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Telus uses the metrics it develops to measure both financial well-being and mental health.
The company’s latest financial results for September show that its employees’ financial well-being score was 65.9 in September, down from 66.7 in February, the last time it was measured, and the lowest since the index was released in January 2021. The score was .
Meanwhile, the mental health score in September was 69.7, down 1.4 points from August.
Allen said financial well-being is “very predictive of people’s mental health.”
If you’re feeling added financial stress, you’re not alone. Unfortunately, that’s a common sentiment.Recent CNBC Your Money Survey It found that 74% of Americans are financially stressed, up from 70% in April.
Academic research is also showing a link between mental health and retirement savings.
According to , people with anxiety and depression are almost 25% less likely to have a retirement savings account. 2017 survey Published by experts at Cornell University and Medica Institute.
Additionally, the study found that people with psychological distress have up to 67% less savings for retirement as a percentage of their total financial assets than those without psychological symptoms.
Indeed, it may be difficult to determine whether mental health conditions lead to poorer economic outcomes or vice versa.
Psychologist Brad Klontz, a certified financial planner and expert in financial psychology and behavioral finance, says, “There has been a lot of research over the years linking financial strain to anxiety and depression. “I’ve been suffering,” he said. Mr. Klontz is also a member of the CNBC Advisory Council.
He said people experiencing anxiety may be more likely to save money, as was seen when the coronavirus pandemic prompted an increase in savings rates.
People with depression may be less likely to plan for a positive financial future, Klontz said, adding that “the opposite may be true.”
Saving money for a long-term goal like retirement is difficult for everyone, he said, because our instincts naturally make us more short-sighted in our thinking.
“We need to overcome our instinctive desire to spend now instead of saving for the future,” Klontz said.
Telus Health research points to a strong relationship between financial preparedness and mental health.
The company found that workers with the highest financial well-being and mental health scores knew how much retirement savings they needed to maintain their desired standard of living. Similarly, those who had the worst scores for mental health and financial well-being had no idea how much money they would need.
Additionally, the survey found that workers who were worried about not being able to retire had the lowest scores for mental health and financial well-being.
The Telus Health study found that whether workers had emergency savings was another factor contributing to high or low mental health scores.
“Not having emergency savings was one of the biggest threats to people’s mental health,” Allen said.
Regardless of income, not having cash set aside can lead to higher levels of vulnerability and anxiety, she said.
Regardless of the benefits provided by their employer, Allen believes that employees can take care of their financial and mental health, such as paying off high-interest credit card debt or putting money aside for an emergency savings. He said there are steps that can be taken to improve.
Additionally, all employees will benefit from understanding the benefits available to them and taking advantage of those benefits, including those related to mental or financial health, she said.
Klontz’s research found that by first developing a “really inspiring vision” for why they save, workers can begin to change their views.
“You have to feel strongly about your goal to take action, because you’re asking yourself to do something that we’re not destined to do,” Klontz said.
If you’re focused on retirement, ask yourself what that stage of life means to you, who you’ll spend your time with, what you’ll do, and how the experience will make you feel. please.
According to Klontz, the clearer your vision, the more likely you are to take steps to achieve your goals.
Similarly, if you’re focused on saving for emergencies, you might imagine the sense of safety and security that having extra money will give you.
