You likely know that stressing about money isn’t great for your mental health, but researchers recently found that it may be easier than you think to turn that around.
University of South Australia researchers have found that two simple financial habits — regularly saving money and paying off credit cards on time — are associated with a positive impact on mental well-being.
The results come from an analysis of the Household, Income and Labour Dynamics in Australia (HILDA) survey database, which contains data from over 17,000 Australians aged 15 and older from 2001 to 2021, including:
- Socioeconomic status
- Physical and mental health
- Labor market dynamics
- Family conditions
- Life experiences
Researchers set out to examine the link between healthy financial habits and mental health to contrast the vast number of studies that link financial stress to poor mental well-being.
Researcher Rajabrata Banerjee explains in a summary of the findings:
“We already know that having high debt and low savings has a negative impact on mental health, but we wanted to learn more about the positive financial behaviours — such as how regularly someone saves or pay[s] off their debt — that may reduce financial strain and cause less worry about money and better mental health.”
What they discovered was that those with consistent financial behaviors, such as paying off debt and setting aside money, “reported increased mental health as well as vitality, social functioning and general well-being.”
While both men and women benefited from healthy money habits, the positive impact on mental health was stronger for men. Banerjee says the discrepancy is due to the fact that “in Australia, financial management is still dominated by men, therefore resulting in a greater impact for that group.”
What’s also notable is that the study found that people of all income levels reaped the benefits of healthy money habits.
The study suggests that even saving small amounts when expenses are high can make a difference in how you feel.
If you’re ready to take action, look at smart money moves as investments in your mental health.
Set up automatic transfers to savings, even if it’s just a few bucks a week. Schedule credit card payments to avoid late fees and interest charges or explore your options for debt relief.
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