A basic understanding of finances and financial securities such as bonds and stocks may help reduce the risk of anxiety and other related conditions such as high blood pressure, according to a Japanese study. To carry out the study, a team of researchers from the Hiroshima University and the Nagoya University pooled data from 2,412 respondents, and asked them about their accumulated wealth, assets, and lifestyle to determine how the participants felt about old age.

The study revealed that financial literacy was not particularly high in the Japanese cohort. The research team also found that men exhibited higher levels of financial literacy compared with women. People with higher levels of education were also more likely to be financially aware than those who had lower education levels, the researchers noted.

According to researchers, people with higher financial literacy had an increased likelihood of earning and accumulating more money during their lifetime, which in turn may reduce their anxiety levels about reaching old age. It also appeared to influence the people’s perception of potential financial risks and uncertainties, helping them prepare for whatever circumstances lie ahead in life.

Researcher Yoshihiko Kadoya said financial literacy helps increase the people’s awareness about financial products. It also enables people to compare all financial options available in the market. Financial literacy also appears to influence the people’s financial behavior, which positively impacts their perception and actual experiences during old age. Kadoya is currently an Assistant Professor at the Hiroshima University.

“We hypothesize that financial literacy increases preparedness for old age through better savings and investment decisions, leading to the accumulation of more assets and earning more income, which enhances financial capacity and reduces anxiety,” the researchers said in an article in ConsumerAffairs.com.

Other factors impact participants’ anxiety levels

The research team found that while financial literacy alone was able to mitigate the risk of anxiety in old age, its effects were further amplified by other factors.

According to the study, marriage played a key role in reducing anxiety levels in respondents with high financial literacy. The study found that married respondents exhibited lower anxiety levels compared with single individuals. Researchers said this could be because married couples work together in preparing for the future due in part to familial responsibilities. This in turn makes financial planning more effective for married couples, the researchers noted.

Age also appeared to be another factor in the participants’ anxiety levels. According to the research team, anxiety levels begin to peak at age 40. The scientists explained that this could be due to increased home and workplace responsibilities in this age group. However, anxiety levels began to decline as people get older and gain access to social security, pensions, and government-funded health care. These financial aids help ease anxiety associated with post-retirement age, the researchers said.

On the other hand, having dependent children appeared to negatively impact the participants’ anxiety levels. Increased anxiety levels can be linked to parents worrying about their children’s welfare and their own. The recent findings have major implications in Japan and other countries where retirees are increasingly becoming a huge part of the general population, the researchers said.

‘People shouldn’t spend time worrying about the future. That is why governments provide pensions, housing, and medical plans. If the perception is that these are not fulfilling their purpose then governments and providers need to look at making them more accessible – if people are still worried then we need to look at educating people about these services that are supplied for their needs,” Kadoya stated in DailyMail.co.uk.

Grow older and wiser by practicing good lifestyle habits that include proper diet and exercise and reading the articles at Preparedness.news.

Sources include: 

DailyMail.co.uk

ConsumerAffairs.com

TandFOnline.com

Hiroshima-u.ac.jp