24th July 2023 is International Self-Care Day which promotes self-care as a vital foundation for health. At Infinity, we strongly believe that financial planning is a form of self-care which can vastly improve mental health. And the science backs it up. We take a look at the link between financial well-being and mental health.
The link between financial well-being and mental health
Fact: financial problems can lead to depression, anxiety, and other mental health issues.
One study by researchers at the University of Southampton revealed that individuals with unsecured debts are three times more likely to have a mental health problem than those who are not.
Another demonstrated a link between financial stress and suicide.
Once mental health starts to decline, it can trigger a vicious cycle. Those suffering from anxiety or depression can find it difficult to maintain a challenging job or tackle financial tasks such as paying bills. This can lead to reduced income potential and increased debt and a decline into a self-perpetuating downward spiral.
On the flip side, sorting out your finances can be a tremendous boon for your mental health.
Financial planning as an act of self-care
If financial difficulties can trigger and/or exacerbate mental health issues, it follows that feeling positive about your finances can relieve stress and have a positive impact on your wellbeing.
So how can you generate positivity over your finances?
The answer is financial planning.
Whether you are trying to get a handle on your debts, starting to save and invest for the future or you already have a portfolio of assets, financial planning will only bring positive benefits. Reducing debt and building wealth will make you feel more financially secure which can give your mental health a huge boost.
That’s why it is an important act of self-care which you shouldn’t neglect.
Six ways financial planning boosts mental health
Financial planning gives peace of mind
When you have a solid financial plan in place, you gain a sense of security and peace of mind. Knowing that you have a roadmap for your financial future can alleviate stress and anxiety about money matters. It allows you to focus on other aspects of your life without constant worry about financial stability.
Financial planning provides a sense of achievement
A professional financial planner will help you identify your short-term and long-term goals and create a plan to achieve them. Whether it’s saving for a down payment on a house, starting a business, or planning for retirement, having a financial plan enables you to take actionable steps toward your objectives. This sense of progress and accomplishment contributes to overall wellbeing.
Financial planning makes you feel positive about the future
Engaging in financial planning allows you to assess your current financial situation, evaluate your income, expenses, debts, and investments, and make informed decisions about how to manage your money effectively. It helps you optimise your financial resources, minimise wasteful spending, and allocate funds to areas that align with your priorities. By doing so, you can build a strong foundation and start feeling positive about the future.
Financial planning is empowering
Once you take control of your financial situation and start making conscious, responsible choices you will reduce feelings of helplessness and increase your overall confidence in managing your financial affairs. This is empowering, and who doesn’t want to feel empowered?
Financial planning prepares you for the unexpected
Life is unpredictable, and unexpected events such as job loss, illness, or accidents can have a significant impact on your finances. Worrying about the financial fallout of these possibilities is detrimental to your mental health.
An emergency fund and life and health insurance are integral parts of any financial plan to provide protection against life’s unexpected challenges. You can’t stop all the bad stuff happening, but you can ensure that you and your family are financially resilient enough to navigate difficult and unforeseen circumstances.
Financial planning gives you long-term financial security
The future can be a scary place, but financial planning allows you to tackle the fear head-on. Knowing that you are building wealth and working towards financial security in retirement, can take a lot of the worry away.
Because we witness its transformational power every day, there’s no doubt in our minds that financial planning is the ultimate act of self-care. All our clients have a financial adviser dedicated to creating a personalised financial plan to help them grow and protect their wealth. Having a strong and stable foundation on which to build leads to reduced stress, peace of mind, and improved mental health.
If those are goals that you’d like to achieve, our financial advisers can help. They support expatriates in Asia on their financial planning journey, providing advice on budgeting, insurance, pension planning, and much more.
Let us help you to take control of your finances, build wealth and improve your health. Contact us for an introductory chat.
A leading provider of expat financial services and wealth management services across Asia.