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.