Managing your finances responsibly doesn’t just benefit your bank account — it can also help to improve other areas of your life, like your health and relationships. Here are three areas of your life that by simply creating a basic financial plan can help you stay happy and healthy.
Studies have shown that health problems can be directly related to financial stress. Take this University of Southampton study, for instance, which revealed that people who are in debt are three times as likely to have a mental health problem than those who aren’t.
Past studies have shown that physical health problems can result from financial problems, as well. A 2008 Associated Press-AOL poll found that as Americans take on more debt, they take on more stress, which can lead to problems ranging from back pains to migraines, ulcers and heart problems.
The takeaway? Staying financially secure and aware allows you to experience less stress, thereby maintaining good health.
2. Marriage or relationship
A whopping 65 percent of couples said they argue about money, according to a survey conducted by the bill and account management service Manilla.com. The survey showed that younger couples are most likely to argue about money daily, and they are also more likely to lie about money. Around 54 percent of respondents from age 18 to 23 said they either always or sometimes lie about their account balances.
The solution? Communicate, communicate, communicate. Before getting married, sit down and talk with your partner about your short- and long-term financial goals as well as how you’d both like to manage your finances together. You may find that managing your finances from one joint account is the best way to go. Or, you may find that having one joint account for bills, and separate accounts for everything else, makes more sense for your relationship.
When it comes to managing finances, all couples are different, so take some time and discuss it with your partner to minimize money-related fights down the road.
3. Social life
When you’re financially responsible, you get to do more stuff, allowing you to have more fun with your friends and colleagues — it’s really that plain and simple. Start by configuring a basic budget using the formula “income minus mandatory expenses.” Your mandatory expenses are bills that have a deadline and you have no choice but to pay, such as your rent, utility bills and student loans. From there, subtract other things you need to deduct, such as retirement savings, emergency fund savings, food and gym membership. Whatever you have leftover is what you can spend on everything else: entertainment, shopping and more. Because you’ve already factored in money to go toward retirement, other savings goals, and all of your bills, going out with friends is something that you know you can afford to do.