The Connection Between Physical and Financial Health

Updated: May 22, 2024

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It’s often thought that having money solves all problems and leads to happiness. While that’s not necessarily true, being financially secure can create a sense of well-being. Being able to afford essential expenses and have additional funds for vacations, outings or emergencies can create confidence and a sense of relief.

However, when you’re experiencing financial troubles, living paycheck-to-paycheck or have unforeseen expenses to cover, your health may also be impacted. Financial stressors have been found to directly correlate with poor physical and mental well-being. To manage your physical and mental wellness, it’s important to understand how your finances and health are interconnected, to identify strategies to help you create healthy fitness overall and, no less important, to navigate your health insurance and stay insured.

The Toll Financial Struggles Have On Your Health


The connection between financial and physical health has long been studied — and the facts may surprise you.

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Debt-related financial distress increases the odds of developing depression by 51%.

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Financial stress can manifest through physical symptoms, such as insomnia, anxiety, migraines, compromised immune systems, digestive issues and more.

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Money problems can lead to unhealthy coping mechanisms, such as turning to vices or under/overeating.

The Vicious Circles of Physical Unfitness and Financial Stress

Struggling financially or physically can lead to feelings of stress, which can trigger many unhealthy habits that can quickly spiral out of control. Without the right relief strategies in place, a vicious cycle of financial and physical stressors manifesting and affecting one another can form. Creating a plan to properly address your overall well-being can help you understand how this cycle works and how financial stress and physical unfitness are interconnected.

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Money and health directly impact one another — and the results can manifest in many ways. Below are a few statistics that highlight how money can be a great source of stress that affects your health.

1. 60% of Americans are anxious about their personal finances. Experiencing financial anxiety can be debilitating and lead to decisions that do not benefit your health, such as forgoing trips to the doctor.

2. Young Americans are more likely to experience financial anxiety. 66% of Americans, 21- to 34-years-old, experience financial anxiety, compared to those 34- to 49-years-old (60%) and 50- to 62-years-old (51%).

3. Gen Z, Millennials and Gen X find money to be a large source of stress. Money ranks as one of the top three sources of stress for Gen Z (67%), Millennials (76%) and Gen X (66%).

4. Nearly 50% of U.S. employees suffer from financial stress. Financial stress can be debilitating for employees, as it can make their productivity suffer and lead to lower work quality.

5. Four out of five employers say their employee’s financial issues are impacting their job performance. An employee who is financially stressed each year loses nearly one month of productive workdays. Additionally, they are twice as likely to seek a new job.

How Financial Stress Affects Your Health and Vice Versa

Your financial well-being impacts more than just your wallet; it can take a toll on your health, too. Money problems like debt can cause significant stress, which can lead to physical and mental issues that can affect your decisions and exacerbate your financial situation.

Lack of solutions can cause financial stress.

Not being able to solve your financial problems can cause financial stress and anxiety. For instance, facing low income or looming debt are just a few of many potential financial stressors that can be overwhelming to tackle.

Stress can lead to unhealthy habits.

In order to cope with financial problems, we often turn to unhealthy habits. This can include overeating or skipping meals, turning to vices, or ignoring problems completely, all of which can exacerbate your financial situation.

Stress can lead to mental health issues.

Beyond unhealthy habits, financial stress can also affect your mental health. You can develop anxiety or depression, both of which can further encourage unhealthy habits.

Unhealthy habits and mental issues can make it hard to bounce back.

Having unhealthy coping mechanisms on top of mental and physical health issues can make it harder to earn or manage money and ask for help. This leads to another cycle of facing financial problems, having difficulty finding solutions and struggling to cope.

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What Is Financial Health and Why Is It Important?

Your financial health refers to the state of your finances, such as how much savings you have, how much you have in retirement funds, how much debt you owe and how much your expenses are compared to your income.

Determining if your financial health is in good shape is essential for a number of reasons. Not only can it help you figure out if you’re on track to reach financial goals, but it can also impact how well you can handle problems in the future.

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Alleviates stress and worries.

Being in good financial health can lay the foundation for a stable and secure financial future. It means you won’t have to worry about living from paycheck-to-paycheck or be troubled if there’s an emergency.

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Ensures you have enough savings.

Being financially healthy means having enough in emergency funds and long-term savings to reach your financial goals.

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Prepares you for retirement.

Considering your financial health means planning for retirement. If you look over your financial health, you’ll be able to plan and save accordingly.

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Avoids too much debt.

A crucial benefit of being in good financial health is a low debt-to-income ratio, which is how much debt you have versus your income. If you regularly check in and monitor your financial health, you can prevent yourself from racking up too much debt.

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Stabilizes your credit score.

Good financial health ensures that you have healthy financial habits, which can help keep your credit score up. This means always paying on time, maintaining a low credit utilization ratio and monitoring your credit reports.

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Breaking Free From Financial Worries

While ensuring your financial health is crucial, your physical health should not be ignored. Devoting yourself to an overall healthy lifestyle will eventually lead to your finances following. By improving both your physical and mental health, you will be more productive, pursue better opportunities and make wiser decisions.

However, this is easier said than done. This is why it’s important to go about living a healthy lifestyle, slowly but surely. Make sustainable changes to ensure you commit to it for the long run.

Make a fitness plan and stick to it

Incorporating physical activity into your week is a great way to ensure you’re in good shape. Set aside time at least two or three times a week to work out, and make sure to physically move your body several times a day by going for a walk or taking the stairs. Simple yet moderate exercise can help counteract stress from all types of challenges you’re facing.

Add more healthy food to your diet

Make sure to add more healthy and nutritious food to your diet. This can come in the form of a healthy shake or healthier snacks. This doesn’t mean that you have to avoid food that you like, but it just means consciously making healthier food choices.

Consider seeking mental health care

Looking after your mental health can be done by seeking mental health care. Professionals can help you tackle points of stress, anxiety and depression and ensure your emotional, psychological and social well-being. To reduce your costs, consider getting insurance for mental health care services.

Get rid of debt

Debt can be a big point of stress that will ultimately affect both your physical and mental health. Aim to reduce your debt by trying different strategies, such as the debt avalanche strategy or the debt snowball strategy. The sooner you get out of debt, the sooner you can reduce your worries.

Consider financial therapy

If there are mental health professionals, there are also financial health professionals. Financial therapy involves seeking help from a professional who can recognize problematic behaviors, reduce any negative feelings toward money and offer solutions to improve your situation.

Consider Financial Therapy

Health insurance is a great way to ensure your finances will stay intact in case the unimaginable happens. A health insurance policy can cover a part of or all your medical or surgical expenses, which can give you peace of mind that you are protected from unexpected, high medical costs.

Aside from this, health insurance plans also come with preventative care, which can let you get vaccines, have screenings or schedule checkups. By keeping track of your health and prioritizing your physical well-being, you can reduce healthcare costs over time.

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Finding affordable health insurance is possible so long as you do your research. However, keep in mind that the average cost of health insurance varies by state and factors unique to you, such as your age, medical history and more.

1. Consider government programs. Medicaid and Medicare are government-funded health insurance programs launched for low-income individuals. While Medicare is for those aged 65 and older, Medicaid covers low-income children and their caregivers and those with disabilities.

2. Evaluate your needs. You don’t have to purchase the most expensive plan if you don’t need it. Recognizing your situation and tallying recurring healthcare costs such as checkups or prescriptions can help you find an opportunity to save money.

3. Think about your health insurance provider’s network. Typically, you will only be able to use and benefit from your health insurance if you get services from doctors in your provider’s network. Otherwise, you’ll have to pay out of pocket. Make sure that your desired provider has a wide network that you can benefit from, so you can avoid having to spend time and money searching for a doctor that accepts your insurance.

4. Look at your plan’s prescription drug coverage. If you often purchase prescription drugs due to an illness or chronic disease, you will want to opt for a plan and provider that works with your prescription drug needs and can save you the most money.

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5 Habits of Financial Fitness

Financial fitness refers to living a financially responsible life. This means making wise decisions when it comes to spending, saving and even owing money. By being financially fit, you can reduce your stress and worries — which often leads to a well-balanced life and better overall health.

However, financial fitness does not come easy. In order to become more financially stable, you need to practice certain money habits and broaden your knowledge. Below are a few ways you can start.

1. Create a Budget

Budgeting is one of the first, and often the easiest, steps to becoming financially fit. This involves monitoring your income and putting a limit on certain expenses in order to accomplish long-term financial goals.

For instance, by establishing a budget, you can ensure you don’t spend too much on take out or unnecessary purchases. This means only dedicating a certain amount to your “fun money” or adding more to paying back debt by reducing costs elsewhere.

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Using a budgeting application is a great way to make the process easier. After all, most budgeting apps are accessible on both the phone and the internet, which makes it great on the go. It also eliminates the need to do math, as the app can do it for you. However, it may take a bit of customization to get the right categories for your transactions right.

2. Minimize Debt

Debt can harm your health in more ways than one. Typically, debt can cause a tremendous amount of stress which can affect your physical and emotional well-being. This can lead to a domino effect of issues, all of which could have been solved if there was no debt in the first place.

Fortunately, there are many strategies to reduce and eliminate debt. This includes paying more than the minimum, consolidating debt to get a lower interest rate or getting a balance transfer credit card.

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While staying consistent with your debt elimination plan is always a good idea, take time to track your progress and evaluate how far you’ve come. Not only does this serve as a reminder, but it also offers you a moment to celebrate your gains and allows you the opportunity to review for improvements. The more you speed up the process, the sooner you can celebrate being debt-free.

3. Establish a Safety Net

Having a safety net, also known as an emergency fund, is a good way to ensure your future self has a plan in case life changes or a crisis arises. This can give you peace of mind in case you lose your income or face an emergency.

Keep in mind that when building an emergency fund, you should have enough to cover three to six months worth of expenses.

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Building an emergency fund can take a lot of time, but you can speed up the process by contributing more when you can. For instance, if you receive a windfall through inheritance, a tax refund, raise or bonus, set aside a certain percentage of it for your safety net.

4. Maintain a Healthy Credit Score

Long-term financial health depends on a strong credit history and score. For instance, your credit score can affect what types of homes you can rent, if you can qualify for certain discounts and what types of loans and lines of credit you have access to.

Be sure to pay all your bills on time, keep your credit accounts thin and limit how much you use your credit cards. By doing so, you can qualify for long-term loans with favorable interest rates, which will save you a lot of money in the long run.

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Every year, you can get a free credit report from the three major credit bureaus — Experian, Equifax and TransUnion — to analyze your credit. Take advantage of this and make sure to check your report for any errors that could potentially be sabotaging your credit score.

5. Look for Passive Income Streams

Being financially fit means looking for ways to generate passive income. For some, it's starting a business, promoting products for a commission or investing. Regardless, it’s important to find ways to make money work for you, including through compounding interest.

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Keeping to what you know is the key to passive income. Analyze your skill set and determine the resources at your disposal. Afterward, determine what you can do to leverage what you already have to create a viable passive income strategy. For instance, if you have a hobby, you can consider opening an eCommerce store or offering it as your service.

How to Analyze Your Financial Health

Over time, your financial health will rise and fall as you encounter changes in your needs and goals. This is why it’s important to regularly review your financial health in context of your current situation — even if you’ve made a plan before. If you do not analyze your financial wellness every now and then, you could end up making decisions based on outdated information.

To make the most out of your money and ensure it supports your goals, you need to regularly check in and review your finances.

1. Self-Reflect And Look At Your Net Worth

The first thing you need to do in order to assess your financial health is to determine your net worth. This is a very quick and easy way to determine your financial situation and it is calculated by taking your assets and subtracting your liabilities.

It can be useful to calculate your net worth once, but it is most valuable if it is done at least once a year. This way, you can evaluate your progress and identify areas that need help over the years.

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There is nothing to worry about if you have a negative net worth today. The point is to record your net worth today and maintain a regular check on it. While you want to see a higher net worth over time, it’s better to be realistic and increase your net worth by 5% or even 10% each year.

2. Figure Out Your Debt-To-Income (DTI) Ratio

Your debt-to-income ratio is often calculated by lenders in order to determine your borrowing risk, but you can calculate it as well to find out how much debt you have against your income. In order to calculate your debt-to-income ratio, divide the amount you pay towards all types of debt each month by your monthly gross income.

For instance, if you owe $100 on your credit card, $250 on your car each month and $1,000 on your mortgage, but you only make $1,500 a month, your debt-to-income ratio would be 90% ($1,350/$1,500 = .90 or 90%).

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Most lenders look at a DTI ratio lower than 30% favorably, but any higher and you may be at risk. After all, it’s a primary factor in your credit score and when getting new credit. A high ratio means lenders may not work with you as it seems like you do not have your debt under control. To keep your DTI low, make sure to reduce your debt as much as possible and keep it below 30% or even 20%.

3. Establish (Or Re-Establish) Your Goals

After finding out your net worth and DTI, ask yourself what you’re aiming for, even if you’ve already done it before. Are you still trying to pursue higher education? Do you want to buy a house in four or five years? It can be easy to change your goals over time, especially as your circumstances change, but making the adjustments finance-wise can be quickly forgotten in the fray.

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In order to regularly remember your “why,” write down your financial goals on a sticky note and put it somewhere visible. This can help keep you motivated and ensure you’re still on the right path.

4. Figure Out How Your Money Moves

Use a budget to figure out where your money is going. This can tell you where you’re spending too much or too little and can let you allocate more funds towards addressing debt or reaching your financial goals. Being aware of where every dollar goes can be overwhelming at first, but once you get a good grasp of it, whether by using an application or writing it down in your notes, you can eventually figure out where you can do better.


Going over budget can be disappointing — but don’t worry. The goal is not to perfect it, but to not go beyond what you’ve set for yourself. For instance, if you went $10 over your groceries but did not overspend your fun money, you can always “allocate” some of your fun money back towards your groceries to balance it out. What’s important is that you do not dip into your savings to fund your basic needs.

5. Manage Your Lifestyle

As your income grows, your lifestyle will too. While budgeting can help you determine where your money goes, it takes a little more discipline to separate wants from needs and make better overall spending choices. For instance, a car can be considered a need for work or school, but it can be easy to justify purchasing a luxury SUV that costs more than a practical car.

Instead of thinking about what you can spend on, focus on what you should be doing to improve your financial health and habits. Taking care of your finances today will allow you to pay off debt, make savings and improve your financial situation in the future.

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Putting your needs first should be the goal of your personal budget. Any discretionary income should only be allocated to wants after needs are met. Similarly, if you have some leftover money after paying for the essentials, you are not required to spend it all.

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Ways Physical Well-Being Can Improve Your Financial Wellness

Next to your financial well-being, your physical health matters just as much. After all, being physically fit can help you reduce any stress and anxiety towards any type of problem. This, in turn, gives you a clearer mind to tackle any challenges.

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Generally, promoting a healthy lifestyle is the best way to balance both your physical and financial well-being. For instance, opting to quit smoking can help you save monthly on costs while also improving your health, while eating healthily can reduce your spending on take out and keep you well-fed.

1. Exercising can reduce stress, anxiety and depression. If you want to soothe your anxious mind and address anxiety and depression, exercise may be the best thing you can do for your mental, physical, emotional, social and spiritual health. This is because exercise releases chemicals like endorphins and serotonin, which can improve your mood.

2. Exercising can address concentration issues. If you’ve had difficulty concentrating, whether it’s due to money problems or something else, exercise can help you keep your focus. Physical activity also boosts your brain’s dopamine and norepinephrine — chemicals that can affect your focus and attention. This lets you do a better job at work, which opens up more opportunities for you financially and career-wise.

3. Exercising can give you more energy. You can boost your energy levels through exercise, which, in turn, induces better sleep at night. Being able to sleep well and gain more energy can do wonders for your productivity.

4. Exercising can help you juggle responsibilities. The discipline required in exercising can be carried over into other aspects of your life, too. Working out lets you build a routine and plan ahead, a mindset which can help you plan better financially, work-wise, family-wise and more.

5. Exercising can reduce health care costs. By exercising, you get to boost your health and ensure you spend far less money on healthcare.

Getting Physically Fit on a Budget

Focusing on your physical health does not have to strain your wallet. You can opt out of expensive classes or athletic wear and simply focus on what matters most: Incorporating movement into your day and eating healthier. Below are a few tips to help you get started.

Identify an activity you like

Going to the gym is not the only option to get fit. There are a number of other cost-efficient activities you can consider instead, such as biking, swimming, jogging or jump roping.

Go outdoors

Outdoor workouts are a great way to take in some fresh air. You can walk, hike or run, or even exercise at your local park. If there are stairs, run up and down them for an intense cardio workout.

Follow a video

There are many free videos online that can help you develop a workout regime that suits your needs. For example, you can look up a 30-minute yoga session or an intense, one-hour workout. Most videos will typically mention what type of equipment you need, but you can also opt for videos that need no equipment at all.

Create a home gym

A home gym does not have to include fancy equipment like a treadmill or indoor bike right away. You can start with something as simple as resistance bands, a kettlebell or an exercise ball.

Start small, avoid injury

You don’t have to spend one or two hours exercising right away, this can just set you up for failure and put you at risk of an injury and, by extension, healthcare costs. Spend around 15-30 minutes at first, then gradually make your way up. Listen to your body and do not overexert yourself.

Expert Insight on How Physical and Financial Health Are Related

Understanding the connection between physical and financial health can be confusing. This is why MoneyGeek compiled insight from several experts to help you understand the concepts better.

  1. How do the effects of financial stress manifest in your physical health and how can you avoid it?
  2. What can your average consumer do to balance out their financial and physical health?
Christine Matthews, LCSW, MBA, CLC, CCTP, BSP
Christine Matthews, LCSW, MBA, CLC, CCTP, BSPCEO/ Owner at Never Journey Alone, LLC
Sandy Bargainnier, Ed.D., CHES, NBC-HWC
Sandy Bargainnier, Ed.D., CHES, NBC-HWCProfessor of Health Promotion and Wellness at the State University of New York at Oswego
Cara Macksoud
Cara MacksoudCertified Financial Behavior Specialist and CEO at Money Habitudes
Nordine Zouareg
Nordine ZouaregAuthor, Speaker and High-Performance Coach at 2x Mr. Universe
Dr. Maura Mills, Ph.D.
Dr. Maura Mills, Ph.D.Associate Professor of Business at The University of Alabama's Culverhouse College of Business
Ed Coambs, CFP®, LMFT, CFT-I™
Ed Coambs, CFP®, LMFT, CFT-I™Therapy-Informed Financial Planner™
Kira Capozzolo
Kira CapozzoloCo-Founder of Twin Waves Wellness Center
Michal Strahilevitz
Michal StrahilevitzMarketing Professor and Director of the Elfenworks Center for Responsible Business at Saint Mary's College of California
John Gardner
John GardnerCEO and Co-Founder at Kickoff
Joshua A. Reed
Joshua A. ReedCertified Personal Trainer at Second Chance Fitness

Resources on the Connection Between Physical and Financial Health

If you are struggling to balance both your financial and physical health — from students to older adults looking to retire — know that there are many resources available to assist you. There are a multitude of organizations and tools that can help you manage your finances better, so you can focus on your physical fitness.

Money Management Resources

  • Broker Check: Verify whether investment professionals and firms are licensed with FINRA's free online tool. Whenever beginning or continuing to do business with a particular person or company, this should be the first resource you consult.
  • Clearpoint: As part of Money Management International, Clearpoint is a nonprofit organization dedicated to identifying the causes of financial concerns and finding solutions. Through their free credit counseling service, they aim to teach people to manage their money better through budgeting, understanding credit, setting financial goals, prioritizing debt repayment and making informed financial decisions.
  • If you’re just starting out saving using a high-yield savings account or similar, use this calculator from to find out the amount you should contribute to accomplish a specific goal each month.
  • National Foundation for Credit Counseling: As the nation's largest nonprofit financial counseling organization, NFCC offers a wide range of services including budgeting and debt management. The organization helps people reach their financial goals and provides them with resources if they are unable to pay.
  • Operation Hope: Through education, Operation Hope empowers underserved communities. By providing financial tools, they help individuals and communities become financially independent. Their programs include credit and money management, small business development, financial literacy and disaster recovery.
  • Take Charge America: Take Charge America's goal is to help people around the country improve their financial situation. They offer free services on financial education, credit counseling, debt management, pre-bankruptcy counseling and even housing counseling.

Student Financial Resources

  • MoneyThink: Students across the country can get financial coaching from MoneyThink. Students learn about saving, budgeting and the importance of financial planning through MoneyThink, which has received resources from financial institutions, corporations and foundations.
  • Net Price Calculator Center: The Net Price Calculator Center is a site by the U.S. Department of Education which allows students to find the Net Price Calculator of a college or university. This lets them find out how much students like them have paid to attend the institution after grants and scholarship aids and can give them an idea of how much they need to save.
  • Student Aid: Using Student Aid’s Loan Simulator, students can calculate their loan payments and choose a repayment option that is best for their needs. This is a great way to reduce or consolidate debt.

Retirement Financial Tools

  • American Association of Retired Persons: Calculate your net worth and see how it changes over time using this calculator from the AARP.
  • Social Security Administration: Based on your actual Social Security earnings record, the SSA has a Retirement Estimator that calculates your benefit amount. Note that these are simply estimates, but they are a good place to start to determine what you’ll need for retirement.

About Nathan Paulus

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Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.

Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.