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Financial Stress: The Link Between Health and Wealth

A man sitting at a table with notebooks and an open laptop.

For many Americans, money is high on the list of stressors. Whether it's day-to-day expenses, unexpected bills, or investing for the future, money is integral to everything we do. And money stress, like any other stress, can affect our physical health.

There are a lot of variables in life, so why focus on the connection between stress and money? Physical fitness and financial fitness are more alike than you'd think.

All the money in the world doesn't mean a thing if you can't get out of bed. And the healthiest body in the world won't stay that way if you're frazzled about five figures' worth of debt.
Jean Chatzky and Michael F. Roizen, M.D.

Money Management = Stress Management

In their book "Age-Proof: Living Longer Without Running Out of Money or Breaking a Hip," Today show financial expert Jean Chatzky and Cleveland Clinic chief wellness officer Michael F. Roizen, M.D., explore the effects of financial stress. They find that the impact on your health depends on your reaction to potentially stressful events.

When confronted with financial difficulties, for example, it's best to calmly meet the problem head-on and seek solutions. You might also fall back on an existing investment plan for reassurance or seek assistance from a financial professional. Reacting with immediate stress and anxiety can result in physical symptoms over time—high blood pressure, fatigue, overeating etc.—and cloud your decision making.

Stress begets stress, so remember that your response and frame of mind may affect your health and your ability to overcome your situation.

Start with Healthy Habits

Even if you don't have a specific "health plan," most of us do have components of a plan in our daily routines. Regular exercise, balanced meals, annual physicals, and even hobbies keep us healthy and happy. When we're stressed, we can deviate from our normal habits. We may eat out more or skip the morning workout, which may affect our health and doesn't fix the underlying problem.

The same goes for our financial habits. At American Century Investments®, we tell our clients that a comprehensive financial plan is key to building wealth. Our experience has been that people with a plan save more than those who don't. At the same time, a plan may help you handle the ups and downs (and stresses!) of financial hazards along the way—economic downturns, illness and resulting health care costs, job loss.

We can help you set investment goals and understand your priorities. Figure out what you're investing for (retirement, college) and estimate the amount you may need for each goal. Then design an investment strategy using the amount of time you have to reach the goal, how much you'll need to regularly invest, and your comfort with investment risk along the way.

Your goal doesn't have to be perfect. Most people tweak their goals over time, but the discipline of having a plan—and following it—is what's important.
Jean Chatzky and Michael F. Roizen, M.D.

Don't Take the Easy Way Out

Once you have a routine or plan, keep your health and your finances top of mind. You don't have to micromanage either one—there's no need to step on the scale multiple times a day or fixate on the daily fluctuations of your investments. Just make sure your everyday actions, on average, keep you on the right track for long-term physical and financial wellness.

Chatzky and Roizen quip that "credit cards are the financial version of stretchy pants." Credit cards, or other financial shortcuts, are comfortable to use in the short term, but when you rely on them too much, you may find out that you've outgrown your budget.

Life can be tricky, though. You may be tempted to stop investing for a long-term goal because of an unexpected short-term need. That may undermine the very foundation of your plan. You might have to make some hard choices about your spending habits and whether your future can afford an investment hiatus.

Need help with your financial plan?

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Jean Chatzky is the financial editor for NBC's TODAY show, is an award-winning personal finance journalist, AARP's personal finance ambassador and host of the podcast HerMoney with Jean Chatzky on iTunes. Jean is also a best-selling author. Her book, "Age-Proof: Living Longer Without Running Out of Money or Breaking a Hip," which she wrote with Dr. Michael Roizen, was released February 28, 2018.

The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.