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Is It Important To Be Responsible With Your Finances?

Is it important to be responsible with your finances?

Studies found that households with higher debts had an increased risk of stress and depression, reduced overall health and higher blood pressure. By carefully budgeting and educating ourselves on finances, we can be happier and healthier, overall.

Key Takeaways

1. A personal financial plan should address your goals, along with planning for uncertainties.

2. Households with higher debts had an increased risk of stress and depression, reduced overall health and higher blood pressure.

3. Budgeting and educating ourselves on finance can make us lead a happier and healthier life.

 

What are some ways to have more financial security? 

A personal financial plan should address your goals, along with planning for uncertainties. It is important to be honest with yourself about how you are currently handling your finances and what you would like to improve. Some ways to manage money include being mindful about how much you are borrowing, having emergency funding, making smart investments, and defining what your necessities are. Budgeting is also a very important aspect of financial security because it allows one to frequently keep track of spending. Without a formal budget, people tend to overspend without recognizing it. Knowing that you have a set limit helps you to make decisions about what is truly important to buy or invest in; thus, helping you to avoid superfluous spending. If you don’t know where to start, it may be helpful to read finance-related content because higher financial literacy was associated with greater financial wellbeing and lower financial concerns.

 

Benefits of Managing Finances 

If enough money is saved, a person has the liberty to pay more for basic needs, which includes healthcare, good quality food and water, and a comfortable living situation. Having these are necessary for a good quality of life, overall. Additionally, studies how shown that daily stressors, such as monetary instability, directly impact mood, relationships, and health. Research has shown that people in debt are more likely to report health problems. Those who are struggling financially are shown to be at a greater risk of myocardial infarction, meaning that there is a higher mortality rate for those who are fiscally insecure. Regaining control over your finances may mean regaining control over various other sectors of your life.

 

Work Cited:

Altfest, Lewis. “Personal financial planning: Origins, developments and a plan for future direction.” The American Economist 48.2 (2004): 53-60.

Bolger, Niall, et al. “Effects of daily stress on negative mood.” Journal of personality and social psychology 57.5 (1989): 808.

Catalano, Ralph. “The health effects of economic insecurity.” American Journal of Public Health 81.9 (1991): 1148-1152.

Chen, Haiyang, and Ronald P. Volpe. “An analysis of personal financial literacy among college students.” Financial services review 7.2 (1998): 107-128.

Choi, Laura. “Financial stress and its physical effects on individuals and communities.” Community Development Investment Review 5.3 (2009): 120-122.

Corlett, John Broughton, et al. “Method of personal financial planning.” U.S. Patent No. 6,253,192. 26 Jun. 2001.

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