Is Money A Source of Stress for You ?

At the end of last year during Christmas break, I read an interesting article about the Number 1 reason Americans are so stressed out. An article from editor Catey Hill on the website Marketwatch.com (see link below)

Money causing Stress ? 

Catey states that money is the biggest source of stress for Americans and research shows. A survey by Northwestern Mutual found that money was the dominant source of stress for 44% of Americans, followed by the 25% who said personal relationships, and just 18% blaming work. And data from the American Psychological Association also shows that money is the No. 1 stressor for Americans: “Regardless of the economic climate, money and finances have remained the top stressor since our survey began in 2007,” the results revealed.

Money stress is widespread — and it’s seeping into our work lives. Financial firm John Hancock’s Financial Stress Survey found that 69% of workers were stressed over their finances, with fully 72% admitting to worrying about their personal finances at work, and one in three doing that more than once a week.

It’s no wonder, as Americans are drowning in financial troubles. Credit card debt hit a record high this year at more than $1 trillion, according to the Federal Reserve. Student loan debt has jumped 150% over the span of just a decade. And not only are Americans drowning in debt. They are also not saving. About 1 in 4 Americans don’t even have a single dollar saved for an emergency.

All of this takes a big toll. A survey by the American Institute of CPAs found that more than half of Americans with debt say that it’s negatively impacted their lives. And a survey released by online lending marketplace LendingClub reveals that Americans who report poor financial health also tend to have poor physical health. Indeed, they are significantly less likely to practice healthy physical habits (59% do not get routine check-ups and 60% do not get regular exercise) and they are more likely to skip preventative health measures due to cost (38%). “Bad wealth begets bad health,” the survey concluded.

What’s more, these money issues are causing more than just some feelings of dread and skipped doctor’s office visits. Here are some of the many ways financial stress may impact your health:

• Depression and anxiety. People with greater financial stress have more symptoms of depression and anxiety than those who aren’t financially stressed, according to a 2013 study published in the journal Anxiety, Coping and Stress. And John Hancock’s data reveals that financial stress is triggering physical and psychological symptoms like anxiety and sleeplessness for roughly 60% of workers.
• Migraines. A study released in 2017 found that for many people, financial stress is related to getting more migraines. Indeed, people with a certain genetic variation of the so-called CLOCK gene — it helps control things like body temperature and levels of the stress hormone cortisol; about ⅓ of the population has this variation — are more likely to get migraines in times of financial stress.
• Ulcers and digestive issues. An Associated Press poll showed that people who are under high financial stress are way more likely to complain of ulcers and digestive problems (27% of them said they had these issues) than those who have low financial stress (8%).
• High blood pressure and heart attacks. High levels of debt may also lead to higher blood pressure, according to a 2013 study of 8400 young adults published in the journal Social Science Medicine. Treating hypertension can cost you $700 or more per year, data shows Annual expenditures for those treated for hypertension averaged $733 per adult in 2010. What’s more, people with high financial stress are more likely to report they’ve had a heart attack or an arrhythmia (6%) than those with low financial stress (3%), according to AP data.
• Disrupted sleep. Well over half of both women (68%) and men (56%) say they lose sleep at least occasionally because they’re worried about money, according to a survey of 1,000 adults released in 2016 by CreditCards.com, a credit-card comparison website. And that can be very costly: Americans spend more than $40 billion on sleep aids.

As I travel a lot to the USA, I notice that there’s a lot of debt in the USA. 44% of the Americans live paycheck to paycheck. If you are in bad health and you don’t have a health insurance, health institutions rob you from all your money as it is incredible expensive. When I was taken to hospital last year in the USA, the emergency ride to the hospital was alone 1500$…  A colleague told me that 14 days in the hospital from his mom costed 250.000$. Who can pay this ? Without an insurance you are simply broke.  No surprise that many people in the USA have financial stress and as a result also health issues.

In Europe and in particular in Belgium the situation is a little different. We have a strong health security system we can rely on and the costs are limited. A health issue won’t put you in a bankrupt situation in Europe. In the USA it can.

Would losing Money cause you stress ? 

Around the same time, I read an article that Belgian people put around 16 billion extra on their savings accounts. The bad year in the stock market caused people to park more money on their savings account, according to the banks. That is a lot of money.

The rate of return on a savings account is 0,11% and the inflation is 2,78%. That means in one year, life got almost 3% more expensive or we lost 3% buying power. So saving on a savings account makes you poorer. But I wonder if that gives Belgian people stress…. do they bother or worry of losing buying power ? Also pension funds lost between 4,5 to 12 % last year. Do people worry about the loss in value of their pension funds ? In the USA and Canada people can decide what investments they buy in their pension fund or stocks plan. In Europe we can not decide this and that is a major disadvantage. This means the banks walk away with the biggest profit in those pension funds.

So key question here… if people lose money while they sleep, do they worry ? It seems to me, they don’t as they keep on parking more money on savings accounts. It all starts with financial literacy and knowledge, right ? If you don’t know how to grow your money, how can you manage it properly?

Final Words

Does money give me stress ? Six years ago , at the time of my divorce, money did give me stress. As I started back from scratch with just an emergency fund, I wondered about my family’s financial future. I think money can be a source of stress if you don’t have enough to support your family and kids.

By building our dividend portfolio and applying my financial knowledge with options and other financial instruments, I feel every day more equipped to generate cash flow in different ways. Life is more expensive with a family of 5 people but every day we invest in our financial knowledge. If you follow this blog, you have seen my skills mapping in our 2019 Financial and Travel objectives. I focus on different strategies which I will apply in the different portfolios that I manage going forward. This is a journey, a marathon, not a sprint.

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Source : This is the No. 1 reason Americans are so stressed out, Nieuwsblad