Behavioral Financial Planning In the News

Is There a Health-Wealth Connection?

There is a commonly held belief among policy makers, researchers, and those in the media that there is a health-wealth connection. Basically, it assumed that those who watch their health by limiting fats and sugars, and those who regularly exercise, also exhibit the best financial behaviors. There is some truth to this. Smokers, for example, don’t accumulate as much wealth over their lifespan and they tend to die earlier than non-smokers. This does not mean, however, that simply because someone is physically healthy they will automatically be a better money manager.

A new publication shows that the real health-wealth connection may not be a physical one. Nick Carr, Ron Sages, Fred Fernatt, George Nabeshima, and John Grable documented that individuals who engage in health information search behaviors, such as reading the contents and nutrition labels of foods, are more likely to engage in financial planning activities. They called thisĀ a form of cognitive health behavior. Essentially, it looks like people who take the time to dig a little deeper into the details of foods also dig deeper into the financial details of their lives.

The paper was published in Volume 26, Issue 1 of the Journal of Financial Counseling and Planning (pp. 3-16). While the paper itself is a bit long and dry, the results have significant implications in explaining why some people are more successful than others in domains of physical and fiscal health.

Disclaimer: Dr. John Grable, the Director of the Financial Planning Performance Lab, was a co-author of the study.