Loneliness and Your Money

How Loneliness Can Affect Your Money

Most people feel lonely at different times in their lives, but in a recent study, one person out of 10 reported being lonely or isolated from others “all or most of the time,” according to the Pew Research Center. Loneliness not only impacts mental health, it can also take a toll on finances.

The Pew survey found that frequent loneliness is linked to dissatisfaction with one’s financial life as well as with family, social, and community life. People who say they are dissatisfied with their financial situations are significantly more likely to feel frequent loneliness than those who are satisfied with their finances (17% vs. 5%). There is no evidence of causality but it is worth thinking about. About 14% of people who say they don’t have enough income to lead the kind of life they want report feeling often lonely or isolated, compared with just 5% of individuals who say they have enough income to lead their ideal lives.

A Link to Finances

Although the survey did not draw any specific conclusions, it indicated a link between loneliness and satisfaction with your financial situation, suggesting how frequent loneliness can exacerbate financial woes.

Specifically, loneliness can cause a lack of awareness about major financial issues, as well as an increased vulnerability to fraud. Lonely people have fewer opportunities to discuss finances with others face-to-face and learn from them. This makes it easier for scam artists to take advantage of them by faking emotional support while defrauding them of their money.

Research has also linked loneliness and worsening chronic conditions. One study found that social isolation is associated with an estimated $6.7 billion in additional medical spending annually. As social isolation increases, chronic illnesses can grow more severe and result in higher medical bills and stress levels. This can have a harsher impact on those trying to cope alone.

Ways to Be More Connected

Fortunately, there are ways to fight against loneliness. Some of our clients have explicitly made a decision to expand their social circle, and they use MeetUp or other apps for their age group or hobbies. Others are volunteering for what they believe in — politics or the environment or helping children – and this has introduced them to new people with similar values, as well as helped them give back to their community.

Joining or starting a book group or film club are also great ways to bring people together. Other things that are reported to make you happier and less lonely even when you are alone – and I can attest it’s been true for me — are being outdoors, reading, and meditating.

Sources: Pew Research Center, December 3, 2018 and AARP, “Medicare Spends More on Socially Isolated Older Adults,” November 2017

 

Blue Spark Capital Advisors

We're a fee-only Registered Investment Advisory and financial planning firm based in New York City and the Berkshires.

We specialize in working with women after divorce, death of a spouse, or other life transitions such as retirement or job change. We provide financial planning and investment management services.

We believe in a holistic approach. Movement in each piece of your financial plan impacts the others, so we consider your entire picture.

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– Samuel Johnson (1709-1784)
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