Step away from the cake! Unhealthy lifestyle linked to money worries

Green apple and chocolate cake on dishes. Young man is thinking what he will eat.

Researchers have uncovered a link between unhealthy habits, poor health and money problems. Apparently people who are in poor health or who eat unhealthily, are more likely to miss bill payments, have nothing in their savings accounts, and struggle to pay for everyday expenses.

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The Financial Wellness Index, from Momentum UK, found a strong relationship between health and finances. Its research, with the University of Bristol's Personal Finance Research Centre, found that around one in six people who class their health as 'poor' have missed a bill payment in the past 12 months. That's more than three times as many as those who consider themselves to be in excellent health. Similarly one in ten people with a poor diet say they have missed a bill payment - more than twice the number of healthy eaters who had done so.

There was also a clear link between health and savings. Those in poor health are half as likely as those in good health to have money put aside for a rainy day - only 8% have. Meanwhile 29% of people with poor diets have no savings - compared to 19% of healthy eaters.

And there was a link between health and cutting back. Some 42% of those in poor health have cut back on lifestyle expenses such as holidays or socialising in the last year, but for those in excellent health, this drops to around one in five (23%).

Why?

The researchers identified that in some instances a poor lifestyle and bad money management are symptoms of the same mindset. Samantha Seaton, MD of Momentum UK (Retail), explains: "Becoming Financially Well is not something that can be achieved overnight, it's a personal journey for most, that will take a level of commitment, honesty and reflection. The link between financial and physical health is strong in this year's index, which is not wholly surprising when you start to analyse the similarities in behaviour needed to achieve both. Whether you're improving your fitness or trying to improve your financial picture success will be found by taking small steps to achieving your longer-term goals."

Not the whole answer

It may be easy for people in some quarters to dismiss both groups as simply not trying hard enough, but this would be to miss the significance of the findings.

To begin with, unhealthy lifestyles and poor money management are often both symptoms of a lack of education and support. The current generation in their 20s-50s, have been given more freedom than ever before in terms of the kinds of food available and the availability of credit. They have been given more responsibilities - especially when it comes to saving for the future. And they have been left to get on with it without consistent education on the subject - or the kind of ongoing support many people need to adapt best-practice to their own circumstances.

It's also important not to overlook the fact that cause-and-effect is difficult to untangle in this instance. If someone has been unwell for a while, then there's every chance periods of sickness have required them to take time off work, which may have impacted their savings. In fact, according to Macmillan Cancer Support, expenses and loss of earnings cost people with cancer an average of £570 a month. It's no wonder that this takes a financial toll as well as a health one.

A large proportion of people in this survey may, therefore, be having to cut back on lifestyle spending, and struggling to pay bills, purely as a result of their ill health - for which they carry absolutely no blame.

Similarly, poor lifestyles and money problems can both be a symptom of an underlying mental health issue. If someone is struggling to face each day, then there's less chance they will be completely on top of healthy eating, and a recent study by the Money and Mental Health Policy Institute found they are three times as likely to have problem debts too.

What can be done?

Professor Sharon Collard, Director of the Personal Finance Research Centre at the University of Bristol says that in the same way as healthy eating and healthy lifestyles are a government educational priority, financial wellness should be on the political agenda too. She says: "Financial Wellness should be a priority not just for individuals but for policy-makers. In the last year, against expectation, we have seen a slight improvement in the UK's overall Financial Wellness, but there is still significant ground to be made, particularly when it comes to the average household's savings provision. This could be a growing concern in the coming months if wage growth remains slow, while inflation picks up."

Meanwhile, people who are struggling with their health - and the knock-on effect on their finances - can feel helpless. Often their money problems weigh even further on their health, and drag them even further into the spiral of money woes and debt. However, there is help available.

Money charities including Citizens Advice and Stepchange, can talk you though your options, and help you apply for any state assistance, to help you keep your head above water while you struggle to get your health back on track. They can also put you in touch with specialists who have tailor-made financial programmes for people suffering all kinds of health issues.

But what do you think? Do you see a link between physical health and financial wellbeing? Let us know in the comments.


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Most common causes of debt
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Most common causes of debt

There are some very common reasons for building up problem debts. Here we reveal seven of the most common, and what you can do if you face them.

Unemployment or illness that means one or more of the household’s earners are unable to work will bring a profound change in family finances, and according to the Money Advice Service is the most common reason for getting into problem debt.

If your circumstances change, therefore, you need to immediately address your family finances, and put everything on a minimum spend lockdown. You should also look into the benefits and tax credits that are available sooner rather than later, to try to close the gap.

If you are on the kind of contract that means varying hours, it can be incredibly difficult to work out what you can afford to spend - making it the second most common reason for getting into debt - according to the Debt Support Trust.

Rather than swinging through the extremes from week to week, the best approach is to establish a budget that will work in the leanest of months, so you don't find yourself getting used to the months when you work more hours.

According to Citizens Advice, trying to service too much debt is the third most common reason for getting into difficulties. The TUC found that those with problem debts spend 40% of their income on debt repayments.

If you are in this position, you officially need some help with your debt problems. If you continue to rob Peter to pay Paul, you will end up owing more and more, so you need to take stock and talk to a debt charity about all your options.

The double-whammy of the legal bills combined with the incredible cost of establishing two separate households is enough to make divorce or separation the fourth most common reason for going into debt - according to the Debt Support Trust.

There's no easy solution, but if you are going through this, it can be helpful to talk through your financial situation with someone you trust or a debt charity, who can help you balance a stretched budget.

Problem debts aren’t necessarily caused by a sudden shock to the system. According to the Money Advice Service, 20% of their clients are simply trying to live on an unsustainably low income.

If you are in this category, it’s important to seek help on the benefits and tax credits you may be able to receive. It’s not always easy to navigate the system, but charities like StepChange have experts on the benefits system who can talk you through what’s available.

The combination of rising costs and stagnating wages over the last few years has meant increasingly people saw their monthly wage cover less and less of their monthly outgoings. This position has started to ease more recently, but has left many people far worse off than before the financial crisis. The Money Advice Trust said a combination of this and unexpected costs was responsible for almost one in ten problem debts.

If you consistently spend more than you are expecting, it's well worth keeping a spending diary. That way you can establish the real cost of living, and start to identify where you can cut costs.

The Money Advice Service says it commonly deals with individuals who have struggled to get to grips with budgeting and debts, and have got into debt because they don’t have the skills and knowledge to manage their money effectively.

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