The health and financial wellness connection

In 2015, Manulife studied how Canadians felt about their financial situation¹ and how that affected their physical and mental well-being. We wanted to gain a deeper understanding of the challenges financially unprepared employees face daily and shed more light on poor finances’ role in their overall mental and physical well-being.

During this study, we had a few key takeaways:

•  62% of employees who reported being financially unprepared blame financial problems as their most significant source of stress
•  32% of employees who reported being financially unprepared worry about supporting loved ones if something happens
• The financially prepared are almost 25% more likely to identify themselves as being very healthy compared to those unprepared
• The financially prepared are four times more likely to be working with a financial advisor than the unprepared

Eight years later, we wanted to know if the health and financial wellness connection has changed.

What is financial well-being?

Financial wellness, or financial well-being, is the extent to which you can meet all your financial commitments and needs while having the financial resilience to continue meeting those needs in the future.

While many may think this is solely concerned with your income, it also includes:

•  Having control over your finances
  
•  Setting and meeting your financial goals
•  Being able to bounce back from a financial misstep
•  Having the financial freedom to make choices that improve your quality of life

For employed Canadians, financial well-being exists on a spectrum. On one end, you have financially stressed individuals; on the other end are financially comfortable individuals. A 2021 study found that financial stress is widespread among employed Canadians and has less to do with demographics like age and income and more with difficulty saving and low financial resilience. But what is financial resilience, and what does it have to do with your mental health?

Financial literacy and health

A person who can be described as financially resilient is someone who feels comfortable in their financial wellness and is equipped to withstand setbacks such as unexpected expenses or a loss of income.

Financial resilience and financial literacy often go hand-in-hand. Someone who is financially literate is a person who is able to make informed and effective decisions with their financial resources.

It should come as no surprise that those experiencing financial stress notice a direct impact on their well-being. And individuals who have low levels of financial resilience and literacy are more likely to experience financial stress, which can lead to serious health issues.

One in three Canadians says that the financial stress they are experiencing is leading to depression, anxiety, and other mental health issues. These negative impacts are heightened when individuals experience long-term financial stress and low financial resilience.

If you are experiencing financial stress, you are:

•  Two times more likely to report poor overall health
  
•  More likely to experience strain in personal relationships
•  Four times more likely to suffer from headaches, sleep issues, and other illnesses
•  At risk of developing serious health issues like cardiovascular disease, high blood pressure, depression, or anxiety.

Managing financial

In 2022, 38% of Canadians said that money is their number one source of stress—this is unchanged from the same survey conducted in 2021.

Knowing that money is weighing heavily on the minds of Canadians and that stress can lead to mental and physical illnesses, what can you do to manage your financial stress?

Knowledge is power —informing yourself about all things money, financial planning, and wellness is a great place to start. Whether you decide to grab a book, listen to a podcast, or tune into a webinar to help you learn more and increase your financial literacy.

Working to establish a financial plan is a great place to start. Seventy-five percent of Canadians who have a financial plan feel like it has helped them improve their ability to mentally cope with the current economic environment. And 79% of Canadians feel it’s helped them cope financially, as well.

Not sure how to create a financial plan? That’s where a financial planner can help.

Speaking with a financial planner or advisor to get advice and plan for your financial future can help you become more financially resilient and alleviate financial stress. Over half of Canadians who work with a professional financial planner believe their mental health has improved as a result. Sixty-eight percent also believe they are in a better place financially than they were prior to working with their advisor.     

A financial planner can help you work through complex issues like budgeting, savings, investments, and future planning to ensure you are set up for success. This process looks different because everyone has their own financial goals and means to work with. Having an expert guide you through your finances can alleviate the stress and potential mental and physical health problems that come from issues surrounding money.

If you are looking for a financial planner to help you feel supported, informed, and confident as you work towards building your financial wellness Manulife’s PlanRight can help.

^{1 Manulife/Ipsos Reid Health and Wealth study conducted by Ipsos Reid, March 2015}

Other resources you may be interested in:

• Episode 4: Aging, anxiety, and the effects of stress on the body (podcast)