3 Vicious Cycles: Links Among Financial, Physical And Mental Health 2/20/21, 4:25 PM

Jun 27, 2018, 05:00am EDT

3 Vicious Cycles: Links Among

Financial, Physical And Mental
Health
Bre! Whysel Former Contributor
Leadership Strategy
I cover behavioral economics, decision-making, finance and philosophy.
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The Russell Glacier. Landscape close to the Greenland Ice Sheet near Kangerlussuaq. America.

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3 Vicious Cycles: Links Among Financial, Physical And Mental Health 2/20/21, 4:25 PM

North... [+]

Feedback loops are powerful forces of nature. Melting polar ice caps
reduce the earth’s reflectivity, causing it to absorb more heat from the sun,
which accelerates the melting. The cumulative, accelerating aspects of
such loops make it imperative to break the cycle before it gets out of
control. Below, I identify three feedback loops among financial and
physical and mental health and some ideas for breaking these vicious
cycles.

Financial Stress

Let's begin with stress. Stress is the body's response to any demand made
on it. It affects almost every system of the body, including heartbeat,
breath, muscles and our brains. A little stress can be a good thing, if it
motivates us to respond constructively to a threat or opportunity and if it
doesn't last too long.

Unfortunately, stress resulting from financial challenges is often chronic,

affecting 26% of Americans most or all of the time. Unexpected expenses,
the need to save for retirement and out of pocket health care expenses are
major culprits.

Stress Spiral No. 1: Physical Health

Chronic stress is linked to physical health issues. High stress causes a

fight-or-flight reaction, releasing adrenaline and cortisol. These hormones
can suppress immune, digestive, sleep and reproductive systems, which, if
sustained, may cause them to stop working normally.

Employees with high financial stress are twice as likely to report poor

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3 Vicious Cycles: Links Among Financial, Physical And Mental Health 2/20/21, 4:25 PM

health overall and are more than four times as likely to complain of
headaches, depression, or other ailments. The chart below shows how
much sicker people with “debt stress” were during the depths of the
financial crisis.

Financial stress is associated with health challenges. CHART BY BRETT WHYSEL FROM DATA AT

HTTP://WWW.NBCNEWS.COM/ID/25060719/NS/HEALTH-MENTAL_HEALTH/T/DEBT-STRESS-CAUSING-HEALTH-PROBLEMS-POLL-

FINDS/#.WZJGUQDKGWV

Stress is also associated with high-risk behavior including alcohol and

drug abuse; overeating, sedentary behaviors like web surfing and TV
watching. These behaviors can worsen one's health and finances.

The potential feedback loop then is financial challenges leading to poor

health, directly and indirectly via unhealthy behaviors. Poor health can
worsen money challenges and financial stress by increasing medical
expenses, reducing productivity at work and making it harder to make
good financial and medical decisions:

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3 Vicious Cycles: Links Among Financial, Physical And Mental Health 2/20/21, 4:25 PM

Vicious Cycle No. 1: Financial stress associated with high-risk behaviors and poor health, which
can... [+] CHART: BRETT WHYSEL

Stress Spiral No. 2: Delayed Healthcare

Financial stress can also harm health when lack of financial resources
causes people to delay necessary medical treatment. One in four
Americans has trouble paying medical bills, with some delaying
treatment. Cost-related non-adherence may be most important for people
with chronic conditions such as high blood pressure, asthma and diabetes.
Fifty-six percent of Americans with common chronic diseases say they've
have missed medication because of cost.

This leads to the second feedback loop: a medical condition results in

unexpectedly high out of pocket costs, increasing stress, which worsens
the condition directly and indirectly as the patient delays needed medical
care and medication. This spiral may become more widespread as more
employers switch to high-deductible health plans, which put a greater
financial risk on patients:

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3 Vicious Cycles: Links Among Financial, Physical And Mental Health 2/20/21, 4:25 PM

Vicious Cycle No. 2: Poor health is expensive to treat, so people delay needed care, which can...
[+] CHART: BRETT WHYSEL

Stress Spiral No. 3: Mental Health

Of course, we experience financial stress mentally as well as physically.

People with debt are three times more likely to have a mental health issue,
especially depression, anxiety and psychotic disorders. Financial stress is
the second most common cause of suicide, after depression. According to
Therapist Rachel Mickenberg, humiliation among the financially stressed
makes it harder to seek help as it worsens mental health.

Mental health challenges can impair financial (and medical) decision

making, self-control and employment possibilities. Those with dealing
with scarcity suffer from greater cognitive loads from managing the
various challenges of making limited means work, impairing executive
functioning including creativity, empathy, planning for the future and
problem-solving.

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3 Vicious Cycles: Links Among Financial, Physical And Mental Health 2/20/21, 4:25 PM

So we have our third vicious cycle. Financial stress is associated with

mental health challenges, which impair financial decision making and
employment, further worsening the financial situation. This can increase
stress, which may then worsen the mental health condition:

Vicious Cycle No. 3: Financial stress associated with poor mental health, impaired decision
making,... [+] CHART: BRETT WHYSEL

Breaking the Chain

Left to themselves, vicious cycles like these can spiral out of control, with
grave consequences for individuals, employers and societies. Fortunately,
there are things individuals and organizations can do to break these loops.

Individuals can take steps to improve their financial behaviors, by better

controlling spending and increasing savings. This begins with
empathetically planning for one's future and creating a budget designed to
make you happier. Others may benefit from the advice of a financial
advisor or credit counselor. We can also work on developing "pride in

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3 Vicious Cycles: Links Among Financial, Physical And Mental Health 2/20/21, 4:25 PM

good money habits - instead of money itself,” exercising, using relaxation

techniques such as yoga and meditation, and obtaining support from
friends, family and, perhaps, a therapist.

Governments, healthcare providers and businesses have a moral

responsibility and a direct interest in breaking these loops which destroy
welfare, social capital and shareholder value. They should sponsor
financial (as well as general and mental) wellness programs to help people
control their spending, attain resiliency with emergency funds, and plan
for the future. Financial institutions need to support such programs and
provide products and services more appropriate to low and middle-
income consumers.

In short, the status quo for millions of Americans is not sustainable. The
typical American is stressed because she lives paycheck-to-paycheck,
saves nothing for retirement, has little financial literacy and is
increasingly being asked to shoulder the costs and uncertainties of
healthcare and retirement. The resulting stress can cause physical and
mental health to spiral along with financial health. It's time we do
something about it.

Follow me on Twitter or LinkedIn. Check out my website.

Bre! Whysel

I am a recovering investment banker, community college teacher and social

entrepreneur who co-founded Decision Fish LLC in 2016 to help people make better
decisions. I… Read More

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