The value of understanding the wealth-health relationship

A necessary lesson for teenagers!

The wealth-health relationship is obvious, yet it is not formally recognised in any school-based curriculum, or on any financial education service or financial information program. It should be, because it underpins all effective financial decision-making.

In the absence of formal education programs, parents and caregivers must take up this responsibility.

As your children grow into adulthood, you will be hoping that they have learnt some financial life skills in the safety of an education program before they must make decisions for real. The ‘real’ financial decisions they make, of course, impact on their lives and perhaps the lives of others. That impact includes health consequences, both positive and negative.

We see this most notably on a large scale when it involves thousands or perhaps millions of people.

At the moment we have much of Europe in a state of financial stress, with austerity measures the common talk of politicians, economists, business owners, employees and families.

An example of the concern that financial decisions can affect the health of people was reported recently in Greece in the Athens News.

‘ … if and when Greece's economic woes are over, a legacy of mental illness could remain in a generation of young people damaged by too many years of life without hope.’

“Austerity can turn a crisis into an epidemic,” said David Stuckler, a sociologist at Britain's Cambridge University, who has been studying the health impacts of biting budget cuts. “Job loss can lead to an accumulation of risks that can tip people into depression and severe mental illness which can be difficult to reverse — especially if people are not getting appropriate care,” Stuckler said.’

As a country’s financial resources decrease, the health concerns of the people increase. There is an imbalance.

It is at the personal or family level, however, that it is most important to explain the wealth-health relationship to children, especially teenagers. It is at this informative age that spending habits develop, usually without an understanding of the health implications.

What is health?

You may have learnt while at school that health has several dimensions — physical, social, emotional, mental and spiritual.

Physical health refers to our state of physical well-being. It usually relates to whether or not we are feeling ill. It is the dimension of health that we become most aware of as a child.

Social health refers to our relationships with others.

Do we have good friendships and supportive relationships with the people in our lives at home, work and play?

Emotional health refers to whether we have positive feelings about our self, good self-esteem, and a sense of purpose in life. Feelings associated with this dimension include being happy, sad, joyous or moody.

Mental health refers to our capacity to think logically, to reason clearly and to see our lives realistically.

Spiritual health refers to our sense of place within the universe. This may take the form of a religious affiliation, but spiritual health is usually used in a broader sense.

The dimensions are not discrete. For example, if you are ill, your physical health is affected, but your mental health may also be affected because you may not be well enough to think clearly.

How does the wealth-health relationship work, and how can we explain this to children? Let us look at recent examples.

The relationship between wealth and health as described above can be a negative relationship.

During the financial crisis which influenced tens of thousands of Australian families, many people lost much of their life savings and superannuation. Many had to re-mortgage their homes, sell assets, or continue working beyond the time when they had hoped to retire.

The physical health of many people in these situations was severely affected. In fact, many people became very ill, including reports of heart attacks and suicide.

There were also many media stories at the time of people being depressed, stressed and worried about their financial future.

money stress

Many tried to sell their shares quickly without getting quality advice. The stress of the crisis led to many people making poor financial decisions. Their mental health was diminished.

When people have less discretionary money, they usually reduce their social activities. They choose to eat out and go to the cinema less frequently because they need to preserve the money they have, and start saving again for their future.

For many people, a severe financial hardship can affect their self-concept and self-esteem. This in turn can influence how they see themselves within their family and community. Spiritual health is not immune to such hardship.

The wealth-health relationship can also be a positive relationship on many levels. For example, when people:

  • can comfortably afford to pay for life and health insurance they have improved health outcomes
  • understand how to manage their finances they have less stress
  • have saved to achieve a goal, e.g. a holiday, they have improved self-esteem and social outcomes.

Both sides of the wealth-health relationship must be acknowledged and taught.

Making such a relationship clear to children can be achieved simply at home when a parent connects the relationship to the lives of their children.

For example, for children who have phones there is a great opportunity to talk about the impact on health if there was a large phone debt.

Having to pay off a phone debt will be stressful (emotional health) and it will also minimise social interaction as money for social activities has to be redirected to paying off the phone bill.

Being unable to pay off the debt may also influence self-esteem and physical health.

From a more positive perspective, a teenager who uses the phone wisely will have a manageable monthly bill, which is hopefully part of an overall budget.

When a teenager realises that money is a tool to be managed responsibly he or she will have less emotional stress. This is a good thing.

The task of making the wealth-health relationship clear to younger children is more challenging because they have still to learn the difference between needs and wants. Many young children want their parents to purchase things for them all the time, and they want them immediately, ironically because the item sought gives them a ‘physical’ high, e.g. from eating certain types of food; an ‘emotional’ high, e.g. from receiving a personal gift or something that will give them peer acceptance, e.g. the latest gadget, which is a social health outcome. These children do not know it, but the reasons for wanting things are health related — that is, they will feel happy (emotional health)… at least for a few minutes!

At a more direct and obvious level, parents can also talk to their children about spending choices that directly influence health. For example, spending money to smoke or to continually eat junk food are choices that have a negative impact on health. Spending money on good food, sport or exercise usually produces good health outcomes (apart from the occasional sporting injury).

At a global, national and personal level there exists a relationship between wealth and health. While this article has focused on wealth as the driver of that relationship, there is also significant research related to how health in all of its forms can influence a person’s wealth position. Both orientations should form part of home discussions, as well as financial education programs you subscribe to for your children. To start such discussions at home, consider using the following quotations.

“The first wealth is health” — Ralph Waldo Emerson. Is this true? What are the variables that influence this consideration?

“To get rich never risk your health. For it is the truth that health is the wealth of wealth” — Richard Baker, an American politician. This is a good quotation to stimulate conversation about life balance. Are there times when you may need to work very long hours, or take on an extra job to earn more money? At such times a person may develop poor health habits which may impact on personal and family life. Is this justifiable?

“So many people spend their health gaining wealth, and then have to spend their wealth to regain their health” — A J Reb Materi. Once again, this quotation also provides an opportunity to talk about life balance and the wealth-health relationship.

The image of the scale represents a balance between wealth and health. Within the image, the scales are evenly balanced, but are there times, when making financial decisions, when we must tip the scales in favour of one side?

An understanding of the wealth-health relationship is critical for good financial and health decision-making. Children should start to learn about this relationship when young. Their wealth-health balance as an adult, as well as the wealth-health of their family, may depend on it.

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