Worrying about money can affect your health, happiness and relationships, according to Dr. Timothy Sharp, a clinical psychologist and happiness expert.
“Financial stress is one of the most common stresses in people’s lives, and it can be detrimental to your overall wellbeing,” says Dr Sharp, the founder of the Happiness Institute and an Adjunct Professor in positive psychology at the University of Technology, Sydney.
“High levels of stress – whether they be financial or other – can impact on your health and happiness in many ways. It can affect your sleep and if you don’t sleep well it can affect all aspects of your life, including marriage, work and relationships. It can also contribute to depression. And in more extreme cases it can increase the likelihood of illnesses, such as cardio-vascular disease, and even lead to earlier death.”
The Financial Health Barometer research, which measures Australians’ attitudes to money and wellbeing, found a strong correlation between savings and health and happiness. It revealed a regular saver is almost twice as likely as a non-saver to say they feel “completely happy” with their life and that they are in “excellent” health.
Published this year by RaboDirect, the research also found that those who live within their financial means are more likely than people who are not in control of their money to feel that their life has purpose, be excited about the future and even more likely to watch their calorie intake.“the amount is not necessarily the key point, but what you do with it.”
Clearly, while money may not necessarily buy happiness, managing your money does.
Dr Sharp (aka Dr Happy) agrees: “It’s not massive amounts of wealth that make us happy. People define wealth in different ways, but more and more money will not make you happier and happier. It’s how we live with the money that we have.
“For example, if you have a family income of $100,000 and your expenditure is $70,000, then you’re going to feel pretty comfortable as you have money to spend on holidays and other things. However, if a family earns $100,000 but they’re spending $120,000, that’s going to contribute to some financial strain.
“So the amount is not necessarily the key point, but what you do with it. When we look at the happiest people, they live within their means – whether they’re earning $50,000, $500,000 or $5 million.
“Living within your means shows self-regulation, control and willpower. These people are also less likely to overeat and to exercise more and be healthier. They tend to engage in the habits that enhance their life, and therefore are happier.“The upshot is that it’s very important for us to feel in control in all aspects of our life. And money is one of the most important aspects.”
The good news is that you can regain control of your finances. Dr Sharp says the first step in overcoming any stressful situation is to do something positive about it.
“I’m not a financial expert, but financial stress is like any other stress. You need to take some constructive action,” he says. “From a psychological point of view, it’s beneficial to set goals. People who set goals for example savings goals, are more likely to feel in control and achieve them.
“Part of that might involve seeing an expert such as an accountant or financial planner to help manage debt, set a budget and get your finances under control. The sense of control you get from managing your money is significantly beneficial to your overall health and wellbeing.”