Americans Feel Healthy, Not Wealthy: The Principal

High stress levels could change that, though

Boomers have much less financial stress than Gen Y, The Principal found. Boomers have much less financial stress than Gen Y, The Principal found.

Gym fees or asset management fees? When it comes to where to invest, more workers are putting their money on their health, according to a report by The Principal. The Financial Well-Being Index found 57% of American workers view themselves as physically fit, compared with just 28% who feel they are financially fit.

Although 84% of respondents agree that physical health is an investment in their financial future, 71% said it was specifically a way to avoid major health costs later.

However, nearly half said they were stressed about their financial situation. Studies have shown that stress can take a serious toll on physical health, leading to anxiety, headaches and even heart disease.

In a survey of more than 1,100 workers, 51% of Gen Y workers said they were stressed about their financial situation; the same percentage of investors who don’t’ work with an advisor agreed. By comparison, just 35% of boomers and 33% of those with an advisor’s guidance said they feel stressed.

“American workers recognize the long-term financial benefits of staying healthy, but financial stress is often a constant pressure that can have a significant impact on their physical health,” Luke Vandermillen, vice president at The Principal, said in a statement.

Still, only 28% of workers said they use an advisor. Their main reason is they don’t want to pay a fee, despite 53% of workers with an advisor saying they are happy with their financial situation and 63% saying they feel more in control.

To combat the stress of a shaky financial foundation, 52% of workers said they had been monitoring their spending in the past year, and 39% say they have a budget. The survey found 57% have an emergency cash fund, although nearly 20% have dipped into it to cover monthly expenses.

“It’s encouraging to see American workers planning for unforeseen hurdles by giving themselves a financial checkup and setting aside money in an emergency fund," Vandermillen said. "Despite a few missteps, like using the fund on monthly bills, these positive behaviors show individuals are making strides and taking personal responsibility to improve their short and long-term financial well-being.”

Instead of blowing their tax refunds on a new iPad, half of workers who expect one (68% expect to get something back) are planning to save or reinvest those funds. Nearly a quarter said they would use their refund to pay off long-term debt, and 39% are putting it toward short-term debt.

The prevailing economic sentiment is cautious, the survey found. Forty-three percent of respondents feel cautious about the economy in 2014, while 27% are optimistic.

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