January is Financial Wellness Month so this month we will emphasize financial health. We know money isn’t everything, but studies show that having enough money makes us happier and healthier. Not having enough money can cause stress and worry and those things can cause health and relationship consequences. Financial wellness is an important aspect of aging because you can’t have financial wellness if you are paying for uncovered medical expenses. Nor can you have financial wellness if you are not working but still paying steadily increasing rent.
Economists talk about how making choices to spend money or resources in one area is really about making choices to not spend money or resources in another area. For instance, if you choose to purchase a car every four years or so, unless you have unlimited funds, you are making a decision to not spend money on a retirement plan or a new house or a vacation or some other major expense. These choices recognize that there is a scarcity of something (in this case money but it could be time or some other thing).
The point is that nothing we do in life exists in a bubble so it’s not possible to make decisions about one area of our lives without ultimately making a decision about other aspects of it. When we make decisions as if these things are not interrelated, it costs us more money, more time etcetera and we sacrifice a cohesiveness that becomes more apparent the older we get.
If having financial health is so important to us then why is it one of the areas we try to do it alone? Here’s an article from The Wall Street Journal that covers mistakes we make with a DIY retirement.
