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Financial Stress May Shrink the Brain

Many Americans have heard the phrase, “money is the number one cause of stress.” Money is a powerful force that can lead to college for a child, funding for a charity or the purchase of a dream home. However, if not used properly, it can lead to tremendous stress and difficulty for the American family. Take for instance the case of so many divorces that stem from financial issues.

Although many Americans have heard that money is the number one cause of stress, and such a statement has been proven in publications such as the American Psychological Association’s Stress in America survey, what may be surprising is that such financial stress may actually lead to a shrinking brain. In recent years, neurological studies have shown that certain types of life events and cumulative stress may actually decrease gray matter in areas of the brain such as the prefrontal and limbic regions. These regions are involved in stress, emotion and reward regulation, and impulse control. According to a study published in the journal Biological Psychiatry, such changes in these parts of the brain may also lead to increased risk of anxiety disorders or depression (1).

Our brains are equipped with tools to help make difficult decisions in stressful times. A perfect example is our fight or flight mechanism. This mechanism helped our ancestors decide how to deal with the stress of an approaching sabre tooth tiger. However, such stress was short-lived. After fleeing to safety from such a predator, our brains returned to a state of normalcy. Today, humans face the stresses of low pay raises, day care costs, mortgages, healthcare costs and college tuition. For some families the stress is never-ending. Our brains still use the same types of tools to deal with these stressful life events, but when it is difficult to return to a state of normalcy, negative consequences may occur. When our stress response system is left on at all times, our brains are left marinating in stress hormones. However, those hormones which were meant for good may actually be killing us.

Another recent study by renowned neuroendocrinologist, Dr. Robert Sapolsky, further illustrates the link between stress, our brains and even physical illness. If having financial stress and possibly losing that important gray matter we depend on so greatly isn’t enough, Dr. Sapolsky’s research shows that cumulative stress may lead to infertility, a weakened immune system, weight gain, elevated blood pressure, heart disease and other physical and mental issues.

Dr. Sapolsky’s research has been conducted within both the animal kingdom and human society, with very similar results. Although Dr. Sapolsky has more recent works, National Geographic highlighted some of his research in 2008 in a documentary called Stress: Portrait of a Killer. This documentary analyzed a troop of baboons in Africa and a sample of humans in London. Baboons share many similarities to humans, especially with social groups and hierarchies. In a baboon troop, there is often one Alpha male that makes decisions for the others. When a “Beta” member of the troop disobeys, they are punished by the troop. Tests were completed on both Alpha and “Beta” members of the troop to determine their state of health. Dr. Sapolsky’s team found major differences in brain function and disease between these two groups. The “Beta” members, especially those facing the most stress from the Alpha male, were found to have less brain activity and greater prevalence of disease.

When it came to reviewing the human samples in London, employees at various levels within a government agency were studied. As with the baboon sample, employees dealing with greater stress, which were often lower-ranking members of the agency, had similar mental and physical results as the baboon sample. They faced more stress and suffered greater consequences of health. National Geographic accurately named their documentary in light of such astounding results.

Although baboons do not face mortgage payments or worry about retirement savings, they do face the regular stresses of “society.” It is possible that such stresses are inevitable. Societal stressors such as daily traffic jams are difficult to control. However, when combined with financial stressors, which are often longer term and more difficult to control, cumulative stress can become a major problem to someone’s health.

All Americans face some type of financial stress. The financial stress Bill and Melinda Gates face is likely much lower than that of someone earning $50,000 per year. One may correlate greater income with lower financial stress, but this is not always true. Take a survey from 2011 which found that 14% of respondents earning six-figure incomes cited living paycheck to paycheck. They may be considered “rich” to some, but have a net worth similar to that of a recent college graduate. Aside from cash flow, even more may be facing a state of unpreparedness for retirement. Living paycheck-to-paycheck is not just a lower-class issue. American consumerism may be to blame for much of the financial stress in our society. This, combined with a complex health care system, ever-changing financial markets and products, increasing college expenses and a failing Social Security system, reveals the stress-inducing ingredients of today’s American society.

Financial stress may seem like a problem left to each individual. However, employers may be the secondary victims of financially stressed families. If an employee is facing financial stress, they may be facing greater mental and physical illnesses. Such illnesses may create higher healthcare premiums for employers, which, of course, are a challenge they must face each year. An AP-ACL Health Poll found that those respondents facing “high” financial stress had a higher percentage of illnesses than those with “low” financial stress (2). For example, the “low” stress group cited severe anxiety at 4% while the high stress group cited the disease at 29%. Heart attacks were doubled between the low and high stress groups. Financial stress and illness may therefore also be a problem for employers.

Many employers already understand the link between financial stress and physical and mental illness. A 2014 Aon Hewitt survey of more than 400 US companies found that 76% of those employers were in search of new ways to help employees with their financial well-being. This may range from more frequent retirement plan education programs to comprehensive financial wellness benefits. Furthermore, employers may stand to benefit in more ways than healthcare premiums. Employees that are facing fewer distractions and stressors are likely better employees. They can focus more on the job at hand rather than bringing their concerns with then when they walk into the office.

Financial stress can greatly be reduced with the right professionals and motivation, but it may also take a holistic approach to reach true wellness. Keeping a healthy diet and exercising regularly are time-tested tools for keeping stress in check. When these general wellness initiatives are implemented and combined with comprehensive financial wellness tools, especially in the workplace, both employees and employers may see positive results.

As more research reveals the complexities of our brain, we may be able to find avenues for curbing deadly stressors in our lives. Until then, our society has a duty to recognize the correlation between financial stress and overall health, and to make it a greater overall priority. Whether we are focusing on our brains, our bodies or our budget, it’s impossible to separate our finances from our health.

More information can be found at

(1) Society of Biological Psychiatry, 2012. Cumulative adversity and smaller gray matter volume in medial prefrontal, anterior cingulate, and insula regions.

(2) AP-ACL Health Poll Debt Stress: The Toll Owing Money Takes on the Body.

Financial wellness and consulting services offered through RFG Advisory Group, an SEC Registered Investment Advisor.

About Travis Freeman, CFP®, (1 Articles)
Travis Freeman is a Certified Financial Planner™ and president of Four Seasons Financial Education, a national provider of workplace financial wellness programs. He is also the author of Make Your Money Work, a book about productivity and financial wellness in the workplace. Travis is a frequent guest on Fox news and is considered a thought-leader for the financial wellness industry.

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