What healthy finances can do for your mental health

There is little doubt that stress causes illness, but few realise just how much finances can add to stress and an unhealthy lifestyle. A recent Vitality UK study found that more than half of employed people have financial stress in varying degrees.

Mental wellbeing and money

Daniel Rabinowitz, a cognitive behavioural therapist says mental health and money are indelibly linked.

“Financial wellness is not a direct result of mental wellness or vice versa. But, they do go hand in hand. If you improve financial wellness, it influences stress, which has a direct effect on mental wellness,” Rabinowitz says.

A similar link was found in the Vitality Britain’s Healthiest Workplace study, which showed employees with financial concerns were losing more than twice as much productive time.

They also reported significantly unhealthier lifestyle choices, such as excessive alcohol intake, smoking and making poor food choices compared with employees with better financial health.

Optimism and changed behaviour

“We live in tough economic times and this is as much a South African issue as it is a global one. Our research shows that 64% of people with poorer financial health see their financial health as good to excellent. This illustrates the optimism bias of South Africans, which means we believe we are in a better financial position than we actually are. On the positive side, we can harness this optimism while looking at our behaviour and how to achieve better financial health,” says Akash Dowra, Head of client insights at Discovery Bank.

Dowra adds that resting easy when it comes to money matters, means adopting financial behaviours like saving regularly, spending less than one earns, taking care of retirement needs, being protected against unexpected events and paying off property as soon as possible.

“Understanding the behaviours that add to improved financial health and changing the behaviours that leave you stressed can help you gain better control, no matter how much you earn, and can alleviate some of the stress associated with financial concerns,” says Dowra.

In this context, a behaviour-change programme like Discovery Bank’s Vitality Money, which motivates and rewards clients for managing their finances better, could provide much-needed support. Vitality Money is an integral part of Discovery Bank’s offering. As the world's first behavioural bank, Vitality Money is designed to help people become financially healthier by rewarding them for improving their relationship with money.

Dinesh Govender, Discovery Vitality CEO says, “We know that five financial behaviours explain 80% of the reasons why people can't meet their financial obligations, both now and in the future. The aim of Vitality Money is to help our clients get all the right things in place financially – from building up their emergency savings, helping manage their debt, determining the right amount of insurance, showing them ways to save for retirement, and encouraging them to pay off their property.” 

Addressing these behaviours leads to greater financial control and independence, resulting in less stress from financial concerns. 

Govender concludes, “Our goal is to help people understand the behaviours that affect financial wellbeing, to guide them to improve on them and become financially healthier.”

Check how healthy your financial behaviour is with the Vitality Money status calculator. It takes a few minutes of your time to learn about your finances across the five behaviours that determine your financial health. Know how to change it and take control of your finances today - Discovery Bank can show you how.

This article is written and sponsored by Discovery. The Vitality Money Calculator is for information only and does not constitute financial advice. Please consult your financial adviser before making any financial decisions.