Sean J. Britton provides EMS clinicians guidance on financial health and wellness principles.
Emergency medical services is recognized as a more hazardous profession than most.1 We work in unfamiliar locations, active roadways and other potentially hazardous environments as we utilize our skillset to care for our patients. Some of our patients even pose a physical danger to us because of an altered state of consciousness from intoxication or acute psychosis. So for obvious reasons our educational programs have long had content on health and safety principles focused on maintaining physical wellness and preventing injuries.
In recent years, the concept of wellness has increased in scope beyond physical health and injury prevention to be a more holistic concept of overall well-being and resilience, which has mental health recognized as a critical component within. The National Association of Emergency Medical Technicians (NAEMT) helped advance this broader perspective in its position statement, “An EMS Culture of Personal Resilience and Wellbeing.”2 The 2021 National EMS Education Standards codified this expanded definition within our initial training standards by recognizing, “Workforce safety and wellness has been expanded to reflect principles of stress management, responder mental health, resilience and suicide prevention across all levels.”3
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As we as a profession continue to increase our recognition of the importance of our own personal health and wellness as clinicians, so too must we recognize the importance of financial health and wellness as a component of such, because evidence exists that financial health is directly linked with both physical and mental health.4 This article is intended to provide EMS clinicians with a baseline knowledge of financial health and wellness principles.
Financial health, much like physical and mental health, has both an objective and subjective component. One way to define financial health is your ability to meet your financial obligations, face unexpected financial stress or challenges, as well as how you feel about your finances. Financial health, once again much like physical and mental health, can be assessed in both its present and anticipated state for the future. Although there are some nuances which differentiate the two terms, financial wellness or wellbeing is often referred to interchangeably with financial health. The four components of financial health are spending, savings, debt and planning.5
Spending
Spending can be assessed by what percentage of your income you save and if you pay your bills on time. While the general rule of thumb is to target a savings rate of 20% of income, any amount of regular savings is better than spending more money than you earn. Here are a few quick tips to improve spending habits:
Track your spending: Self-tracking of a behavior can often be used to drive a change in behavior. Keep a log of what you are spending your money on or use an app which links to your electronic payment methods so you can see spending by category. Sometimes we don’t realize how much money we have spent in a certain way until we go back and look.
Go cash-only: There are benefits to using credit cards appropriately, but carrying a balance with interest usually negates those benefits. Try only using cash for your purchases for a few weeks. For some people swiping a card doesn’t have the same feeling as handing over cash, so the switch to cash helps control spending. As a set amount of cash for spending visibly disappears over a period of time we also become more mindful of the spending choices we make because we see the actual cash versus having a seemingly never-ending amount of credit.
Make one little change: Changing any behavior, including how we spend our money, is hard to do. Rather than big drastic changes, you can start with one small action, like bringing one more meal, snack or beverage to work each week. Little improvements can be built upon over time.
Savings
Savings can often be put into buckets based on time or intended purpose. It’s nice to have savings for unexpected situations or emergencies like an unexpected vehicle or home repair. Once this emergency fund is built it will likely provide an enhanced sense of financial security. A general rule of thumb is to aim to have three to six months’ of cash expenses available in an emergency fund. It is commonly reported that roughly half of Americans do not have this level of savings.6
Savings can be medium-term, such as for a vacation you would like to take within the next few years or a home purchase. Savings can also be long-term, such as for retirement. Longer-term savings have time to grow and can consist of investments like mutual funds, which can have a more significant financial return over time. Savings should meet a combination of short, medium and long-term goals. Savings should also provide flexibility for unexpected events along the way.
Spending and savings are very closely linked and move together but in opposite directions. As spending goes down your savings may increase and as your spending goes up your savings may decrease. One strategy to boost your savings is to develop a budget to limit spending.
Start developing a budget by reviewing where you have been spending your money. As you review your spending, reflect upon how well the spending aligns with your values and goals. If you find spending that doesn’t align well with your values or goals, then see if there are ways to eliminate that spending by making a change. After you eliminate spending which doesn’t align with your values or goals, start using that newly found money to build your savings.
Debt
Debt could be either a beneficial tool or a stressful burden. There are some purchases it’s not feasible to have cash available for, such as a home or a vehicle. n these instances long-term, structured debt can help us to achieve goals. Timely payment on lower-interest debt improves your credit score for other instances when credit is needed. The biggest factor affecting your personal credit score is consistently making your payments by the due date. If you struggle to remember when payments are due, try setting a recurring reminder with an alert on your phone calendar.
Debt which has become unmanageable can be incredibly costly in interest rate expenses as well as mentally stressful. Some people find themselves in over their head with credit. It’s important to remember that credit issuers forecast their financial models for groups of people and with the expectation that some individuals within the group will end up defaulting on the debt. This is important for consumers of credit to know because it means that you can never assume that having credit extended to you means you are well-positioned to pay it back. Unfortunately, there are people who take on difficult to handle debt believing the lender wouldn’t have given it to them if they couldn’t successfully manage it.
Planning
Planning within the framework of financial health refers to looking forward to our own future. One component of that is to anticipate what our expenses may be and then make sure our savings plan is likely to adequately prepare us for what we anticipate, often with a realistic view of health and longevity.
The second component of planning is identifying and limiting our financial risk. The main way we do this is through insurance and estate planning. Insurance planning protects us from what we don’t want to happen such as a major illness, injury, damage to our possessions, or untimely death. Americans are required to have certain types of insurance coverage while others are optional and often not thought about. As much as we don’t like to think about “what-ifs” or our own death or disability, there is a benefit to being financially protected. Some types of insurance are available through an employer to its employees and others require working on your own with a licensed agent or broker.
Another important component of planning is estate planning. While most people would think first about wills and inheritance, there is another important component to consider: Who will make our medical decisions for us if we cannot make our own and what will those decisions be?
As clinicians, we interact with patients who have do-not-resuscitate orders or medical orders for life-sustaining treatment (MOLST) forms which indicate the resuscitative actions they do or do not want. We also encounter patients who have suffered acute illness or injury which requires them to be completely dependent upon life-sustaining technology. We all get to decide for ourselves what we would want in those situations, but it’s through the creation of estate planning documents that we are able to match our desired wishes with the decisions that are made.
You can pursue creating estate planning documents by working with an attorney who is licensed in your state and specializes in estate planning. There are also internet-based services which offer standardized documents for common estate planning situations, but thorough due diligence should be performed prior to making a selection to use one of those services.
Final Thoughts on Financial Health and Wellness
Some of the elements within financial health are unpleasant to think about or discuss. However, it is important we do so anyway because positive financial health and wellbeing can also improve our physical and mental health and wellbeing. The better our own personal state of health and wellbeing is in all aspects, then the better suited we will be as clinicians to deliver high-quality compassionate care to our patients.
References
1. Emergency Medical Services Workers. National Institute for Occupational Safety and Health, 2022, https://www.cdc.gov/niosh/topics/ems/default.html. Accessed August 21, 2022.
2. National Association of Emergency Medical Technicians (2017). An EMS Culture of Personal Resilience and Wellbeing. Retrieved from http://www.naemt.org/docs/default-source/advocacy-documents/positions/ems-culture-of-personal-resilience-and-wellbeing-7-14-17.pdf?sfvrsn=f60cf92_6
3. U.S. Department of Transportation, National Highway Traffic Safety Administration (NHTSA). 2021 National Emergency Medical Services Education Standards. 2021, https://www.ems.gov/pdf/EMS_Education_Standards_2021_v22.pdf. Accessed August 21, 2022.
4. Bialowolski, P, Weziak-Bialowolska, D, Lee, MT, Chen, Y, VanderWeele, TJ, & McNeely, E. (2021)The Role of Financial Conditions for Physical and Mental Health. Evidence from a Longitudinal Survey and Insurance Claims Data. Soc Sci Med 281:114041. doi:10.1016/j.socscimed.2021.114041
5. Parker, S., Castillo, N., Garon, T., & Levy, R. (2016). Eight ways to measure financial health. Chicago: Center for Financial Services Innovation. Retrieved on August 21, 2022 from http://cfsi-innovation-files.s3.amazonaws.com/wp-content/uploads/2016/05/04151431/Consumer-FinHealth-Metrics-FINAL_May.pdf
6. Bennett, K. (2022). Survey: Majority of US households uneasy with level of emergency savings. Retrieved on August 21, 2022 from https://www.bankrate.com/banking/savings/financial-security-emergency-savings-june-2022/