Breaking News: A recent study published in teh journal *Stress & Health* reveals a strong correlation between consistent financial habits and improved mental well-being, with regular saving and prompt debt repayment considerably boosting psychological health, energy levels, and social connections.
The research, which analyzed data from over 17,000 Australians aged 15 and above between 2001 and 2021 as part of the long-term Household, Income and Labor Dynamics in Australia (HILDA) survey, highlights the profound impact of financial stability on mental health. HILDA collects comprehensive information on economic situations, mental and physical health, work patterns, family life, and personal experiences.
Professor Rajtara Paneragi from the University of South Australia, a lead researcher on the study, emphasized that high levels of debt and low savings are detrimental to psychological health. “We found that individuals who consistently save and manage their debt effectively experience the best psychological health,” Paneragi stated. “Conversely,those who do not save at all face meaningful psychological pressure,and the same principle applies to debt management.”
The study also noted that the current rise in the cost of living disproportionately affects young people, who often have limited savings and higher debt burdens. This financial strain can negatively impact their financial behavior and overall psychological health.
Interestingly, the positive impact of regular saving and debt management on mental health was found to be more pronounced in men than in women.However, the study underscores that adopting stable financial behaviors can enhance mental well-being across all socioeconomic and economic strata. Even saving modest amounts can yield positive psychological outcomes.
“Financial distress is an incredibly stressful experience that negatively impacts an individual’s mental health and their economic future,” Professor Paneragi explained. “When individuals are under financial pressure, they often struggle to save or invest for their future goals.They might potentially be forced to borrow to cover basic needs, trapping them in a cycle of debt and high interest payments.”