Financial stress can increase risks of chronic disease

In tough economic times it is not difficult to imagine the financial stresses that many may be facing. However, a study presented by Momentum Multiply at the Actuarial Society of South Africa’s 2016 Convention revealed that high levels of debt (and the stress associated with this) can pose substantial health risks.

The analysis of health and debt data of 20,000 consumers revealed a link between financial stress and physical wellness. The study was carried out by Nico-Louis Minnie, Johann van Tonder and Ina Shaw.

According to the World Health Organisation (WHO), physical health is “a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity,” as explained by Professor Ina Shaw (PhD), from Momentum Multiply Rewards in the presentation.

As such, this would include financial wellbeing, as stresses stemming from financial problems may result in an aliment in one or all of these areas of well-being. “What many individuals do not realize is that financial wellness is an essential component in physical wellness and vice versa,” said Shaw in the presentation.

What the results indicate

One of the examples highlighted in the study was that consumers with abnormal blood pressure were more likely to be 90 days or more behind on debt repayments, noted Nico-Louis Minnie, head of Momentum Multiply Rewards and a fellow of the Actuarial Society of South Africa. In addition, those with high glucose measurements were found to be more likely in arrears on their debt repayments.

Minnie explained: “Blood pressure and glucose are two of the factors used by Momentum to calculate a person’s Healthy Heart Score, which measures the risk of developing cardiovascular disease like a heart attack or stroke within the next 10 years.

“This research shows a clear link between consumers’ financial health and their physical health. Through our research we have noticed a relationship between the level and state of consumers’ indebtedness and their likelihood of suffering from chronic diseases, which in turn will have a negative impact on their financial situation.”

Furthermore, the research indicates that when a consumer’s personal loans total more than 20 times their monthly salary, there is a sharp increase in their chronic claims the next year.

Shaw noted that financial stress can impact medical care. “People with financial burdens neglect important preventative care or medical regiments. In the long term, this will lead to worsened health problems (resulting in more medical bills).”

Relevance to South Africa

Over the past few years there have been a significant deterioration in household finances. According to Minnie this makes the research conducted by Momentum Multiply even more relevant in the South African context.

“Our research findings confirm the state of financial health as a contributing factor to the substantially higher number of medical claims over the past few years. We are now planning to more closely examine the effect of other financial behaviours on physical health, such as financial planning, savings, spending habits and debt management,” said Minnie.

Reducing financial stress

There are a number of things that you can do to help relieve your financial stress, as well as improve your physical health. Regular exercise and a balanced diet are important for maintaining physical health.

Better management and understanding of your finances will also help to reduce stress. This includes developing a budget (and sticking to it), financial planning, and seeking out professional assistance. This can include a financial advisor, or if your finances are really bad and you are struggling to repay your debts, a debt counsellor.

Minnie highlighted that the top 5% of consumers who had good credit scores had sought financial advice.

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