Study Finds People With This Money Habit Live Much More Peaceful Lives, Even If They Don’t Make That Much
Findings from the study concluded that people can live happier lives regardless of their total income.
Christin Hume | Unsplash Despite how fulfilled people might be in life, money still remains the central focus for being able to live and enjoy life. However, the key to happiness isn't actually how much you're making but how you're handling your finances. While a majority of Americans aren't financially secure, it doesn't necessarily mean they're living miserable lives, at least according to research.
A study published in the journal Stress and Health seemingly proved that you don't need to be making six figures at your job just to live a peaceful life. In fact, the best way to take care of your mental health is to take care of your finances in ways that work for you.
People with good fiscal management live much more peaceful lives, even if they don't make much money.
According to the study, good fiscal management seems to be the key to bliss. That peace comes from regularly saving money and paying off bills, whether it's credit cards, house payments, car payments, or even student loans.
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The findings from the study were based on data from 20,000 Australians over the course of 20 years, alongside the Mental Health Inventory-5 — a scientifically validated screening instrument for anxiety and depression — to calculate their results. A 1% increase in savings was linked to a 0.475% improvement in mental health scores, while a 1% increase in consistent credit card payments led to a 0.507% boost.
People who made the same amount of money but had poor fiscal management had more anxiety.
Researchers found that being fiscally responsible helped reduce "financial strain," including the stress of not knowing how you're going to be able to cover bills and unexpected circumstances or costs. This totally makes sense. When you're spending more than you can afford, that stress builds, but if you're able to pay your bills each month, even if you aren't living lavishly, that stress evaporates and you are left with peace of mind. Simply knowing your credit is secure and you have enough "just in case" can be the difference between daily peace and constant stress.
"When individuals are financially strained, they often can’t save as much or invest, so they miss out on growth and meeting those goals they might have set for the future," study co-author Rajabrata Banerjee, a professor of applied economics at the University of South Australia, said in a statement. "People can also become reliant on borrowing to meet their basic needs, and this can lead to high interest payments and continuous debt cycles."
Researchers hope their findings can help people take the necessary steps to ensure they're taking care of their mental health while also balancing their finances. "That’s why healthy financial behavior is important to build stability and long-term security, allowing goal achievement, independence, and access to opportunities, as well as reduced stress and good mental health," he said.
A good majority of Americans admit they don't make enough money to pay their bills.
According to a CNN poll, nearly four in ten (39%) of U.S. adults said they worry most or all of the time that their family’s income won’t be enough to meet expenses. The poll showed that 35% of adults reported having recently taken on extra work to make ends meet. Even higher percentages of Latinos (52%), Black Americans (44%), and those under the age of 45 (47%) said they’ve taken on extra work.
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Other people said they’ve cut back on driving (41%), and they are taking on credit card debt to afford necessities (37%). It's not just people who can't cover their bills, either, but many Americans don't even have emergency funds.
A 2025 U.S. News survey found that two in five Americans (42%) don't have an emergency savings fund. Nearly as many (40%) couldn't cover a $1,000 emergency expense with cash or savings, though 60% said they had an unexpected expense pop up in the past year.
While Americans would enjoy making more money, it seems there would be a lot more peace if they not only made enough to pay their bills but also enough that they could start putting money into their savings account. But, unfortunately, many individuals are forced to live paycheck to paycheck and sacrifice certain lifestyle choices just to keep their heads above water.
Nia Tipton is a staff writer with a bachelor's degree in creative writing and journalism who covers news and lifestyle topics that focus on psychology, relationships, and the human experience.
