We all know that stress is bad for your health. But did you know that stress can also hurt your bank account?
It’s true. High levels of unmanaged stress, regardless of the cause, can actually prevent you from achieving your financial goals — and even cause you to lose money.
Stress Affects Job Performance
For most people, excellent job performance equals new opportunities and greater earning potential. When you perform poorly, there’s a good chance that you’ll find yourself in the unemployment line.
In some cases, poor job performance is due to outside factors, like a failing economy. In many cases, though, poor job performance has more to do with the individual. Presenteeism, when an employee is at work but not working up to their potential or meeting productivity standards due to health or personal issues, is a growing problem, enough so that many employers are beginning to offer corporate mental health services to help struggling employees.
Employees who are distracted by stress in their lives, due to issues with a spouse or partner, finances, health problems or other triggers are often unable to meet their employers’ performance standards. As a result, they are unlikely to excel and therefore unlikely to earn promotions and raises — and are vulnerable to demotions or even being fired, which won’t do your finances any favors.
Stress Reduces Risk Tolerance
Ask any millionaire about the secret to success, and he or she will tell you that they had to take risks to get where they are. It’s unlikely that you will ever get rich doing the same things you have always done and playing it safe.
Yet when you are already stressed out and anxious, you’re probably unwilling to deliberately create more stress. After all, starting a business or making a significant investment comes with a substantial level of risk — the business could fail, you could lose money — and that can keep you up at night. So you play it safe, instead opting to stay on your current path, to avoid creating any more uncomfortable situations. You may feel slightly safer, but you’re also denying yourself the opportunity to grow your wealth and have a more secure financial future.
Stress Leads to Overspending
You have a bad day at work, so you hit the mall on the way home and buy a new pair of shoes. You worked late all week on a major presentation, so you blow off some steam with your friends on Friday night — and end up with a huge bar tab. Your old refrigerator finally breaks down, so you head out to the appliance store and buy the first one you see, without doing any research or comparing prices.
It’s a fact that when we are under stress, we don’t always make the best decisions, especially when it comes to money. Whether you are an emotional shopper who buys new things in an attempt to feel better, or an impulse buyer who puts off major purchases until it’s too late to make smart decisions, stress can very easily cause overspending — which significantly impacts the bottom line.
Stress Increases Health Care Costs
According to the American Psychological Association, 75 percent of all health care costs are due to chronic illness — and most chronic illnesses are directly related to or exacerbated by stress. Stress reduction and management are important to treating chronic disease, and more health professionals are beginning to see the wisdom in taking care of patients’ mental health as well as physical health, to both avoid chronic disease and more effectively treat it.
Still, though, people spend thousands of dollars per year on medical care, including doctor and hospital visits and medication, to treat illnesses that could be more effectively managed through stress reduction — thus draining financial resources that could be better used elsewhere.
It’s all but impossible to avoid all stress in modern life. However, there is no reason to let stress take over and affect every aspect of life. To protect your health, your relationships and your finances, learn how to better manage your stress and take time to care for yourself. This means making time for the things that are most important to you, like family, hobbies and travel. This means taking care of yourself, by eating healthy, exercising and getting plenty of sleep. It means setting boundaries between work and your personal life, and avoiding toxic relationships.
If you’re having trouble with any of these, or you aren’t sure where to begin to reduce stress in your life, get help from your doctor or a qualified mental health professional who can help you develop better ways to cope with stress. In the end, you will have a happier, healthier life — and a much healthier bank account.