If you put off planning for your financial future, know that it’s not just bad for your wallet—it can also affect how long you live.

A new study led by Joe Gladstone, assistant professor of marketing in the Leeds School of Business, found that people who plan for their future financial needs are less likely to die prematurely than those who live in the present. 

The study, published Sept. 27 in the journal Plos One, analyzed data from thousands of people in two cohorts of older adults living in the U.S. and England who were asked about their planning horizons on spending and saving. The researchers then matched their responses with government mortality records to see how long they lived.

The results showed people with a shorter financial planning horizon had a higher risk of dying prematurely, even after controlling for factors including age, gender, income, education, health and life expectancy. In the English sample, which included 11,298 people evaluated over 10 years, participants with a shorter planning horizon had a 9% greater risk of dying. Those in the U.S. sample, comprised of 11,478 people evaluated over 22 years, had a 7% greater mortality risk.

The study also found health and longevity benefits of financial planning were the strongest among people with the fewest financial resources and therefore the least margin for error, suggesting that planning may be especially beneficial for low-income individuals.

CU Boulder Today sat down with Gladstone to discuss the link between mortality and financial planning.

Given the study’s findings, how far into the future should people be looking with their finances?

It’s very scary how many people are living week to week, month to month, paycheck to paycheck. The majority of people are only looking financially out no more than a month ahead. But for those people who are able to look further into the future, they're able to make different choices, make different tradeoffs about savings versus debt, make sensible financial plans and talk to their loved ones about their financial futures.

And we think that this is why people are able to live longer—because they're in a better financial position and future if they have more long-term financial foresight. The people who live the longest are the ones who are looking years into the future.

What advice do you have for people who are living paycheck to paycheck and aren’t able to look even a couple months down the line?

It's not easy for everyone to look far into the future. At the same time, I think all of us have some level of slack in our budget. And if people are able to build up even a tiny reserve of money and use it to think further into the future, that might very well have positive effects both on their finances and their health.

The effect we're describing is even stronger among lower-income, lower-wealth people. The benefits of thinking long term into the future seem greatest for people who actually have the least.

We have a natural tendency as humans to be too short-termist in almost every aspect of life. We care about rewards and pleasure today, and we care less about the costs and the consequences of the future. It’s the same with money. The bottom line is there might be really big rewards if you're able to postpone those pleasures, have a bit more self-control and think more long term.

How has your research changed the way you think about your own finances? 

I'm a planner. That's my natural tendency, but I think it can work for us all. Maybe just taking a Sunday afternoon rather than getting caught up in the fun of the weekend to think further into the future with your finances. All of us could benefit from being more long-termist when it comes to money. 

Lots of people get stuck in a cycle where checking their bank balance is a negative experience. So try to find ways to create positive reinforcement. Maybe rather than just checking your bank balance, which might be in the red most of the time, you instead have a spreadsheet where you are able to track how your wealth is changing over time or how your debts are decreasing over time.

Are there any surprising differences between the US and UK when it comes to mortality and financial planning?

Americans don’t live as long as people in the U.K., but what's surprising is that the patterns are very similar. Given there is a national health service in the U.K., which means health care is basically free to everyone at the point of service, you could easily point to the fact that people there think more long term with their money—they're richer, they are able to access better health care resources—that's why they live longer.

Well, that can't be the case if we see the exact same pattern in a more socialized system of medicine as we do in a more privatized system like the U.S. The fact that we see the same patterns shows us that it's not just simply a mechanism of people with more resources being able to afford better care, and that leading to longer longevity.

We see the same general patterns in both countries: The longer people are able to plan financially into the future, the longer they live, despite the fact that the systems of health care are completely different. It really shows you there's something deeper about human psychology happening than just about government policy or health care systems.

Looking at tens of thousands of people over decades of time, we see these very clear, consistent, fascinating patterns—it really tells us there's something important going on between financial planning and longevity.