Stop "Soft Saving," Your Mental And Physical Health May Thank You

The temptation to buy and spend is undeniable. It seems as if every trend on Instagram and TikTok pushes an expensive anti-aging skincare gadget or overpriced supplement that promises to enrich your confidence, enhance your self-care routine, or simply just make you feel better. However, the constant association of products, experiences, or anything categorized as an “unnecessary want” with improving your quality of life can be dangerous, especially if it means digging yourself into a bottomless hole of financial chaos and debt.

Findings released by Experian revealed that, in 2022, the average American adult held $5,910 in credit card debt alone. With the addition of student loans, mortgages, personal loans, and car debts, the overall debt for an individual is a staggering $101,915.

The antidote to the chaos is establishing financial wellness in your life. While there are many dimensions to financial health, at the core is the intention to prioritize managing bills, expenses, debts, and financial emergencies and planning for long-term financial goals such as investing and saving for retirement.

The magic of achieving financial wellness extends beyond monetary stability, so let’s unpack its powerful benefits that could impact your life forever.

Improved Mental and Physical Health

Do you ever feel so stressed about money that it’s impacting your day-to-day life? Turns out, you’re not alone. According to a recent survey from Thriving Wallet, 90% of Americans reported that financial considerations have an impact on their stress levels and 65% are feeling that their financial difficulties are piling up so much they can’t overcome them. 

Reports have shown high rates of depression, fatigue, sleeplessness, and anxiety related to financial stress. In fact, 86% of people with mental health issues and debt say their debt makes their mental health issues worse.

In an interview with Everyday Health, Sheila Dowd, Ph.D., associate professor in the Department of Psychiatry and Behavioral Sciences at Rush Medical College in Chicago, explained, “Financial stability is so important for survival. The fear related to that can trigger a stress response.”

Getting into debt beyond means of repayment ranks as the fifth most stress-inducing life event.

Not only do poor money choices impact mental health, but they influence physical health as well. The Society of Occupational Medicine ranked getting into debt beyond means of repayment as the fifth most stress-inducing life event, even above finding out that your partner is unfaithful. Individuals dealing with uncontrollable debt and spending habits have reported higher cases of migraines, muscle tension, higher blood pressure, back pain, ulcers, indigestion, and heart problems.

An important way to alleviate money stress and promote a healthy mind and body is to set a budget. According to a study by the National Library of Medicine, a budget helps people feel like they’re in control, which may help reduce existential dread and anxiety. 

The 50/30/20 budget has been a popular template touted by financial experts. The simple and straightforward plan dedicates 50% of your total monthly income to needs, 30% for wants, and 20% for savings.

Living without the overhead of debt and toxic spending habits can encourage mental clarity and overall health. Financial wellness will allow you the space and peace to focus on the things you love without the added stress.

A State of Gratitude

For years, psychologists have touted the life-changing benefits of practicing gratitude. Gratitude, in its simplest form, is when you feel thankful for all things in your life, big or small.

A review of 70 studies that surveyed over 26,000 people found a correlation between higher levels of gratitude and lower levels of depression. People with an attitude of gratitude tend to pursue goals that keep them feeling good – a positive attitude promotes positive action. They engage in activities that support healthy sleep, such as eating well and exercising regularly. 

When it comes to finances, living in a state of gratitude turns what we have into enough. We become more aware of the connection between our emotions and spending habits. Being mindful and present in financial decisions is a key component of financial wellness.

Next time you get dragged down the rabbit hole of what everyone else has or what you think you should have to be happy, gently close your eyes, breath, and remember how you are already living in abundance with everything that currently surrounds you, and that is enough.

A Brighter Future

It’s so easy to get caught up in the moment and forget about what’s to come. In fact, according to a recent analysis by The Penny Hoarder, 32% of working-age Americans – about 58 million people – have no retirement savings. Working adults in their 20s have the lowest recorded savings rate, with nearly half confirming they currently have no savings. 

In fact, Gen-Z is leading the charge on a new trend called “soft saving.” A “soft life” is a lifestyle that embraces comfort and low stress, prioritizing personal growth and mental wellness. Soft saving is essentially an extension of a soft lifestyle that prioritizes a better quality of life over extra money tucked away in a savings account.

Soft saving is essentially an extension of a soft lifestyle that prioritizes a better quality of life over extra money tucked away in a savings account.

However, this trend has caused high concerns for retirement and the quality of Gen-Zers’ futures. Two in three Gen Zers are not sure if they will ever have enough money to retire, while a majority are convinced they won’t retire early – and some don’t want to retire at all, according to a report by Intuit.

Andy Reed, head of investor behavior at investment management firm Vanguard, explained in a recent interview with CNBC, “Spending money on things that truly make you happy is great … [but] people should satisfy their near-term needs and stay on-track with their long-term goals before spending freely.”

The key to financially living in the present but generating awareness for the future is balance. Whatever your long-term goals are, whether that’s investing or putting money away into a 401K, managing a healthy balance between your present lifestyle and future goals is essential. 

It’s easy to turn a blind eye to what life will be like at retirement age, but soft saving doesn’t account for the natural changes or changes of mind that happen in life. We don’t know for sure that we will never want to retire. The power of financial wellness provides the option and freedom to choose when the time comes. Saving now for retirement will ensure that you have enough money to enjoy a comfortable standard of living when you stop or reduce the number of hours you work.

Closing Thoughts

As lovely as a new cashmere sweater is or how great a luxurious European vacation sounds, if we can’t afford it, it can potentially do more harm than good in the long run. Living beyond our means perpetuates the habit of overspending, which then trickles down into poor mental and physical health as well as an unstable future. The beauty of financial wellness is that it puts you back in the driver’s seat of your finances. It grants you the freedom and the power to choose a healthier path for your mental, physical, and overall well-being.

Lastly, it’s important to note you don’t have to have a high income to achieve financial wellness, and you don’t need to completely stop spending on things you love that spark joy. The key is discipline when it comes to budgeting, prioritizing your needs vs. your wants, and mindful spending. When you master those habits, your present and future self will thank you for investing in financial wellness!

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