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Money might not be the key to happiness, but we all know it can be a major source of stress and anxiety just the same.
Researches have found, though, that there is one predictor as far as someone living a more peaceful life, no matter their salary – and it’s being responsible with your cash.
A study published in the journal Stress and Health concluded that the best way to take care of your mental health as it relates to finances is to manage your money thoughtfully. Peace comes from saving money and paying your bills off on time – yes, even credit cards.
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Their data is based on responses from 20,000 people over the course of 20 years. They used a scientifically valid screening tool for anxiety and depression, the Mental Health Inventory 5, and found that people’s mental health scores increased in proportion with their amount of savings. Also, these increases in happiness were found in people who made their credit card payments consistently.
The researchers concluded that reducing financial strain and the stress of not knowing how you are going to be able to cover your bills helps people feel more in control, and less likely to be stressed over money.
Conversely, stress builds when you spend more than you can afford, and when you don’t have any “just in case” wiggle room.
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Study co-author Rajabrata Banerjee, an applied economics professor, elaborated in a statement.
“When individuals are financially strained, they often can’t save as much or invest, so they miss out on growth and meeting those goals they might have set for the future. People can also become reliant on borrowing to meet their basic needs, and this can lead to high interest payments and continuous debt cycles.”
The team hopes that publishing these findings will help people recognize the link between good mental health and being financially responsible.
“That’s why healthy financial behavior is important to build stability and long-term security, allowing goal achievement, independence, and access to opportunities, as well as reduced stress and good mental health.”
This information is especially important considering that nearly 40% of US adults say they worry most or all of the time about being able to afford their family’s monthly expenses. 35% of adults in the US take on extra work to make ends meet, and those percentages go up in communities of color and also in older demographics.
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Times are hard, and people are cutting back on driving and even even using credit cards to afford necessities to make ends meet. In addition, 42% of Americans do not have emergency funds for those situations that are bound to crop up sooner or later.
The more people who are forced to live paycheck-to-paycheck, the more anxious and depressed people are going to remain.
And the only way out is to figure out how to better live within our means.
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