The most recent
Principal Financial Group Financial Well-Being
Index
-- a quarterly survey of American workers at small, growing
companies -- reveals some interesting links between Americans'
financial health and physical health.
Here are five observations about the state of fiscal and
physical health among respondents to this survey:
-
If you think Americans look out of shape, you should see
their bank statements.
In recent years, health agencies, along with public figures such
as Michelle Obama and Michael Bloomberg, have expressed concern
over an epidemic of obesity among Americans. The Principal
Financial survey suggests that there may be an even greater
epidemic of flabby finances. Survey respondents were even less
likely to view themselves as financially healthy than physically
healthy. 53 percent of respondents consider themselves physically
healthy, while only 31 percent view themselves as financially
healthy.
-
Good intentions aren't always followed up with
action.
For some of the 31 percent of respondents who consider themselves
financially healthy, this confidence may not be based on any type
of concrete planning. Only 28 percent of respondents even have a
household budget, and just 17 percent have created a financial
plan.
-
Many people view health as an investment.
While the evidence suggests that too many people are failing to
plan financially, they are at least thinking ahead when it comes
to the relationship between good health and their financial
future. Seventy-six percent of respondents think that by spending
time on their health now, they'll reduce medical bills in the
future. However, given how few have followed through on even
rudimentary financial planning, there is no guarantee that all 76
percent of respondents are actually taking regular steps to stay
physically healthy.
-
People may be carrying faith in good health too
far.
Even good health can't make you immortal, but the survey
indicates that most people fail to acknowledge their mortality by
creating a will. 54 percent of those surveyed do not have a will
in place. Some expressed the notion that they do not have enough
money to worry about a will, but there are issues besides money
-- most notably, provisions for the care of any children -- that
should be addressed by a will.
-
Emergency funds are recovering.
Savings rates in the U.S.
were chronically low even before the Great Recession, and
household finances have taken a beating ever since. Still, if
that recession taught Americans one thing, it was to prepare for
setbacks, and the survey suggests that people are at least trying
to
beef up their emergency funds
. Over the past two-and-a-half years, the percentage of survey
respondents who have an emergency fund has risen to 66 percent,
up from 61 percent. At a time when bank rates offer little
immediate incentive to save, the growth of emergency funds is a
sign that more people are starting to think ahead
financially.
It makes sense that people view staying physically healthy as an
investment that can save them medical expenses in the future. They
might also want to recognize that this linkage works the other way
as well and that following a sound financial plan can reduce stress
and thus help people stay healthier. In any case, when it comes to
both fiscal and physical health, consistent effort is the best path
towards success.