By Maria Ferreira, Senior Behavioural Economist at the Think Forward Initiative (TFI)
As a result of the pandemic, the conversation around our collective physical health has never been so prevalent. However, less frequently discussed is exactly how the past 12 months have impacted our financial, and in turn, mental and physical wellbeing.
New research from the Think Forward Initiative (TFI) shows that the three areas, often referred to as the “wellbeing trinity”, are inextricably linked: financial stress is affecting, more often than we would expect, both the psychological and physical comfort of many people in Europe. Surveying over 5,000 individuals across five European countries, TFI found that over a quarter (26%) of respondents reported that anxiety surrounding their personal finances regularly impacts their mental and physical health in a negative way.
More specifically, as a result of financial stress, 27% of people reported strain on their physical health and 26% said they were struggling to sleep at night. Monetary stress made 31% of respondents admit to feeling emotionally unwell, while 28% of people noted their social lives had been negatively impacted as a direct result of financial worries. Perhaps most worryingly, TFI’s research suggests a positive correlation between the state of one’s finances and their personal relationships, with one in five stating that their close relationships had suffered because of their financial struggles.
However, the breadth of issues stemming from financial concerns seem to be driving a positive change amongst consumer behaviours. TFI’s research unveiled that an increasing number of Europeans are taking action to improve their financial wellbeing. Overall, 43% state they are controlling more of their spending and 39% claim to be saving money in order to better cope with their financial concerns, partly brought about by the pandemic. According to TFI’s findings, this behavioural shift is most prevalent amongst consumers younger than 45 years old, who have fared financially slightly worse throughout the pandemic. We hope that this will lead to a longer-lasting behavioural change, because when people are set into positive motion to improve one of these areas – either financially, physically, or mentally – the others are likely to follow suit.
TFI’s findings shed light on the often overlooked connection between financial, emotional and physical health. Most importantly, though, they draw attention to the need for widespread action to encourage and support those who require it most. Building back better from the pandemic presents us with a renewed opportunity to form healthier financial behaviours that, in the end, are likely to benefit us in many other domains of our lives. At TFI, we are committed to supporting this: empowering people to make better financial decisions to improve their overall wellbeing.
