Make sure you stay physically and fiscally fit.
“There’s definitely a connection,” says independent financial planner Cory Davenport. “Being physically fit can reduce your health-care costs and health-care premiums and out-of-pocket costs. It’s not just health insurance. People who are physically fit typically pay less for life insurance as well.”
He cites another example. Not smoking has obvious physical benefits. In addition, he says, eliminating a pack of cigarettes a day at $5 per pack amounts to more than $1,800 annually.
“If you invested that money at a modest 5 percent return over a 40-year working career you’d accumulate more than $200,000,” he says.
Davenport also points out that research has shown a link between a person’s financial health and their mental health.
“The likelihood of having a mental health problem such as depression or anxiety is about three times higher among those with extensive unsecured debt such as credit card debt,” he says.
Tim Brandon, education and marketing coordinator of the Consumer Credit Counseling Service of Miami Valley, agrees.
“People who have poor financial health typically have more stress and that can cause all kinds of problems physically,” he says. “Getting your finances under control is one part of making your whole wellness picture complete.”
The first step to financial health, he says, is to determine your financial goals, whether it’s saving for retirement or getting out of debt.
“Write those down, of course,” he says. “Make sure they have some time frames on them and some measurements so you can see you are progressing through those goals.”
A budget is critical to any financial plan.
“Know what your income is and what you have to spend so you don’t overspend,” he says.
Saving also is vital. How much you save depends on individual circumstances, but saving should be a line item in any budget.
“Pay yourself first,” he says.
People don’t hesitate to see a doctor when they’re physically sick. In the same way, Brandon says, people who sense their financial health is failing—maybe bills aren’t getting paid or they’ve experienced some sort of life change such as losing a job or being divorced—should seek help.
Credit counseling agencies, he says, can help people establish a financial plan and get back on track.
“Do your homework (when picking an agency) to make sure they are going to help you and not just charge you enormous fees,” he says.
“They tend to have a longer life expectancy so it’s important to plan for longevity,” says Davenport, who does a lot of retirement planning.
“It’s kind of a balancing act you want to live the lifestyle you want (in retirement), but at the same time you want to make sure you don’t deplete your assets and be broke at say 75 to 80 when your life expectancy might be the late 80s,” he says.
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