Many of us are no strangers to financial stress. In fact, research by Sun Life Financial has shown that nearly half of Canadians surveyed reported feeling an uncomfortable level of stress over their household finances. That mental burden can hinder your performance at work, strain your relationships and threaten your physical health.

"A certain amount of stress is important," says Dr. Donna Ferguson, a psychologist at the Centre for Addiction and Mental Health in Toronto, who notes stress is essential for our fight-or-flight instincts. "But once it goes beyond a certain point, it can be harmful." And some of the health complications linked to stress can be life-threatening.

That’s why being smart with your money isn’t just about financial security, it’s also an important part of healthy living.

4 health benefits of smart financial decisions

Here are 4 ways that making smart financial decisions can benefit your health — and 4 steps to take toward financial, physical and mental wellbeing.

1. Stop losing sleep over money worries

The stress of looming debt isn't exactly the stuff dreams are made of, and financial worries can keep you tossing and turning all night. “You're ruminating on how to change your financial situation, and that internal tape player doesn’t stop,” says Ferguson. “It takes a toll on your health because you’re not just emotionally exhausted, you’re also physically exhausted.” Alleviating stress helps you relax more easily, so you’re likely to get better-quality sleep, and avoid the weight gain and lowered immunity linked to sleep deprivation.

2. Keep your heart healthy

The physical effects of financial stress can negatively affect your heart, too. One reason? Cortisol. The body releases cortisol in response to stress, which can increase both your heart rate and blood pressure. It's no surprise, then, that heart attack rates spike during times of economic uncertainty. Building healthy savings helps you ride out tougher economic times, shielding you from the stress that goes along with them.

3. Manage your blood sugar

You may be able to blame cortisol for poorer diabetes control in times of financial stress, too. Cortisol naturally raises your blood sugar levels, and chronically high cortisol can make it harder to control your blood sugar. Managing financial stress can help you lower your cortisol and manage your blood sugar more easily, reducing your risk of complications.

4. Lower your risk of depression and anxiety

Financial stressors don’t generally single-handedly cause mental illness — other risk factors, like genetic predisposition, play a significant role — but they can be the tipping point that triggers depression or anxiety, says Ferguson. Struggling to meet your basic needs can worsen depression, and financial stress can also cause tension in your relationships, further straining your mental health. Good financial health can remove one source of tension. Combined with support from a medical professional, it can help depression or anxiety feel more manageable.

How to take control of your money – and reduce stress

Good news: Simply taking the first step to create a plan to address your finances can relieve your stress and let you take a deep breath:

1. Banish bare-bones budgets

Budgets are a bit like diets: They can take the fun out of spending the way a diet can take the fun out of eating. Instead, go for a more realistic spending and savings plan, which helps you achieve your goals but still enjoy your money.

2. Consider getting life insurance

Providing for your family in the event of a critical illness or death is a common financial stressor. Securing your family's finances with life insurance and critical illness insurance may be just what you need to feel better.

3. Take advantage of workplace benefits

Employers are increasingly offering financial education to their employees. Ask if you can access financial consulting as part of your workplace health and benefits package.

4. Talk to an advisor

Planning for the future can be challenging. But remember that you don’t have to go through it alone. An advisor can help you put together a solid financial plan that suits your needs.

Most important, seek out health resources to help you manage the physical effects of financial stress if you're struggling. A family doctor, psychologist, counsellor or other health professional can provide the care you need to feel healthy and energized so you can chase your financial dreams.

More ways to deal with stress: