Financial stress may lead to actual physical pain.
Financial insecurity has been linked to feeling a higher level of physical pain and there is a simple way to avoid this health concern.
By Nick Johnson, August 2016
According to a recent study published in Psychological Science, the flagship journal of the Association for Psychological Science, financial stress may lead to actual physical pain. “Overall, our findings reveal that it physically hurts to be economically insecure,” explains Eileen Chou, the researcher and lead study author of the University of Virginia. “Results from six studies establish that economic insecurity produces physical pain, reduces pain tolerance, and predicts over-the-counter painkiller consumption.” Based on my observations helping clients during stressful times, I can agree that Chou’s research is valid; financial stress can manifest itself physically. However, there is a simple way to avoid this health concern caused by financial stress; making sure clients are educated on their finances. When you take the initiative to plan and learn more about your finances, you instill confidence in yourself and have peace of mind by taking control of your financial future.
Chou’s findings indicate that the link between financial stress and physical pain is caused by feeling a lack of control over one’s life. As the financial insecurity problem continues to grow, people have a number of concerns. For many of our clients, feeling out of control is exactly how they would describe their current situation. About 80% of our clients are oil and gas professionals and executives. These clients have respectable jobs and generous benefits, but despite that, a number of them are going through a period of financial insecurity given the current volatility in the oil markets. They are concerned about layoffs, where their next paycheck will come from, or whether they can retire now instead of their initial plan to work longer. Often times, it’s likely they did not perform in-depth cash flow modeling. If they did perform cash flow modeling, then they might be concerned with forgetting an important piece of their financial plan. Laying out a plan can often be the remedy to relieving financial insecurity.
Looking back, the thought of financial insecurity leading to physical pain reminds me of a particular moment when a client called me to discuss his severance package. He described himself as feeling physically ill. Notably, he appeared unwell when he came into the office to discuss his concerns. He expressed he lacked confidence because he doubted his control over his financial picture. He was concerned about minimizing taxes, making sure he did not leave any money on the table in regards to his benefits, and knowing where money would come from in order to cover his expenses during retirement. I sat down with both him and his wife, to lay out a plan. At their first follow-up review meeting, I saw the relief on their faces; they laid out a plan, retired, and took control over their financial picture.
Financial insecurity has been linked to feeling a higher level of physical pain and laying out a solid plan is often the remedy.
Click here to read the full study published in Psychological Science.
Nick Johnson, CFA®, CFP®
Nick Johnson believes that financial planning is more than numbers on a balance sheet and a standardized process. People are unique and should be treated as such.
As Vice President and a Wealth Manager at Willis Johnson & Associates, his goal is to really get to know his clients, all the while providing a proactive approach to comprehensive wealth management.