How $500 in Savings Adds Up To Better Mental Health
Posted by : Raj | Posted on : Tuesday, May 5, 2009
By Michelle Studer
Losing sleep over budget concerns? If money stress is making sleep hard to come by, you can lessen this anxiety by stashing as little as $500 in a savings account. According to a recent MSN Money Central article, this quick fix for financial stress was discovered by Stephen Brobeck, executive director for the Consumer Federation of America.
Brobeck combed through 4 years worth of consumer survey data to determine savings trends among U.S. households with annual incomes of less than $50,000. Examination of the survey data revealed that personal savings habits had a significant impact on psychological well-being. More specifically, Brobeck found that households with at least $500 in savings had less anxiety and got more sleep. For example, 85% of respondents who didn’t keep at least $500 in the bank admitted to fretting about their finances within the past year versus 69% of respondents who did have savings of at least $500. Furthermore, 53% of the under-$500 savers reported that they “worried a lot” about finances, compared to only 21% in the over-$500 savers group. The “worrier” respondents from both savings categories were also asked about their sleep habits, general health, and work productivity over the course of the year. Once again, the under-$500 savers fared poorly. Even when compared with other “worrier” respondents, under-$500 savers got less sleep, had worse health, and were less productive at work.
Surprisingly, Brobeck was able to determine that these findings had little to do with either income level or perceived cost of living in relation to actual savings. Many of the over-$500 savers felt they needed to save more in order cover their needs, yet this moderate amount of savings was still enough to make them less anxious overall. On the other hand, under-$500 savers did not reap the same rewards, even when they had savings of several hundred dollars.
There were also some distinct differences between the under- and over-$500 savers. Over-$500 savers tended to be:
- Older (by 4-5 years)
- More Educated
However, the biggest difference between the two groups came down to basic budgeting habits and savings goals: the over-$500 savers were more likely to have them compared to the under-$500 savers. The bottom line? Socking away $500 may not be an option if you live on a shoestring budget, but anyone with a little financial leeway can easily begin to budget for this – and should. If you haven’t saved up at least $500, work this savings goal into your budget plan or create one using the site tools. Doing so will do wonders for your financial and mental health.