Here's How Financial Education Can Improve Your Health

A new study has linked education about personal finance topics—including learning about credit cards, saving, and overall money management—to improved health outcomes.

The study, published in the American Journal of Lifestyle Medicine, focused on low-income single mothers, and found that participants who completed a financial success program (FSP) had significantly reduced financial strain, as well as a reduction in avoiding medical care and an increased rate of smoking cessation.

"By mitigating financial stress, individuals graduating from the FSP increase their capacity to plan ahead and can think more clearly about financial decisions to improve economic stability, reduce financial stress, and ultimately improve overall health," Nicole White, PharmD, CDE, primary investigator for the study and associate professor of pharmacy at Creighton University, told Health.

Here's a closer look at the study process and its ramifications for the general public.

How Financial Education Can Improve Health

Researchers at Creighton University set out to evaluate how participation in a financial education and coaching program impacted the health of low-income single mothers in Omaha, Nebraska.

The study, which took place between April 2017 and August 2020, involved 345 employed, low-income single mothers between the ages of 19 and 55 whose income was no more than 200% of the 2017 Federal Poverty Level. Participants were divided into two groups: those who completed a nine-week financial success course and those who received no intervention.

As part of the study, White and her colleagues tracked the participants' health indicators, such as blood pressure, cholesterol levels, weight, and perceived quality of life. The study found that participants who completed the financial education course engaged in a variety of healthier behaviors compared to those who did not. They showed:

• Significant increases in constructive financial behaviors: writing down and prioritizing financial goals, utilizing a written budget, saving money regularly, paying bills on time
• Significant reductions in detrimental financial behaviors: borrowing money, maxing out credit cards, paying bills with late fees, overdrawing bank accounts
• Significant increases in salary and job promotion
• Significant reductions in financial stress
• A 5% reduction in the rate of tobacco use
• Significant reductions in avoidance of needed medical care due to cost

Though the study was focused on one particular group of women who took part in a specific financial education program, White said the findings demonstrate that an intervention aimed at addressing financial instability or literacy can positively impact health. In addition, education and coaching programs may have similar effects on other low- and moderate-income populations.

She added, however, that the study does have its limitations. "I don't think the outcomes demonstrated by the FSP are universal among all financial education and coaching programs," White said. "However, I do think there is promise that the outcomes demonstrated through participation in the FSP could be achieved by groups of individuals outside single mothers with low-income."

Other experts see broad ramifications for the study findings, pointing out that it it's unlikely the outcomes of the study would be isolated.

"There is ample research that shows socioeconomic status is linked to health," Lois Ritter, Ed. D., MS, MA, teaching associate professor for the Masters of Public Health Program at the University of Nevada, Reno, told Health. "Financial education enables people to have the means to engage in a healthy lifestyle. They are able to purchase healthy foods, live in nicer neighborhoods, purchase a gym membership, get massages, and obtain medical and dental care."

Indeed, even though some programs might not have the same curriculum, structure, or benefits that the FSP provided to participants in the study, having access to any financial education is better than no education and can still have health benefits, Kortney Ziegler, PhD, Stanford University CCSRE Race & Technology Practitioner Fellow and CEO of WellMoney, told Health.

"Even though some programs may not have the same additional benefits this particular program does, I think it still demonstrates how [much benefit] a financial education can have on improving someone's overall health and financial well-being," Ziegler said.

Other Ways Finances and Money Can Affect Health Outcomes

Finances and money are among the leading causes of stress reported by Americans, according to the latest Stress in America survey. White said stress not only increases the risk of chronic disease, but it can also cause psychological, immune dysregulation and inflammation, which are both root causes of many prevalent chronic disease conditions.

A study from 2015 supports this reality, highlighting the link between diseases and stress and inflammation. The diseases mentioned included cardiovascular dysfunctions, diabetes, cancer, and mental illnesses such as depression and anxiety disorders.

"Additionally, people who are under significant financial stress are more likely to smoke, drink alcohol, consume less healthful diets, and lead sedentary lifestyles," White said. "These behaviors further potentiate chronic disease risk."

What's more, higher levels of stress over extended periods can cause general feelings of uncertainty and financial anxiety, which can result in difficulty controlling worry, sleeping, or even physically through muscle tension and fatigue, Emily Koochel, PhD, AFC, CFT-I, senior financial planning education consultant at Fidelity's eMoney Advisor, told Health.

"Stress is powerful. It has been reported that other conditions can be worsened or even caused by financial stress: weight gain or loss, diabetes, high blood pressure, insomnia, and more," Koochel said.

But having access to financial education, mentoring and coaching, such as the Financial Success Program, can provide money management skills, support, encouragement and accountability, and other resources to help increase saving and reduce financial stress, White added.

She said that a reduction in cumulative exposure to financial stress not only impacts the health trajectory of people with low incomes, but, as they attain financial stability, the stress from finances decreases and the "subsequent wear and tear on the body is lessened."

"Likewise, as financial stability increases, less time and energy are funneled into addressing financial needs and attention can be shifted to other areas like healthy lifestyles," White explained. "Combined, these effects may help manage weight, lower blood pressure and glucose which may ultimately reduce cardiovascular disease risk."

To access financial resources or education, Ziegler said people can look for training or information online, which are oftentimes free. He added local universities, community colleges, and local health departments may offer financial education and coaching, as well.