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Lack of sleep costing you a fortune?

Written by Suba Iyer - 6 Comments

A sleep-deprived, bleary-eyed look is practically a rite of passage for most new parents. I knew I wouldn’t get much sleep for the first few months, so I planned for it. I finished all my assignments ahead of schedule, and arranged for help with household chores. I was prepared for my sleepless nights — at least I thought I was. One thing I forgot to consider was how much it would affect my finances. Now that my baby is three months old, I am getting much more sleep. I was doing our usual year-end review when I saw in numbers how much our sleep deprivation has cost us and how much of a positive influence a good night’s sleep can have on finances.

How can sleep affect your personal finances?

Pay for convenience: Poor sleep makes our bodies weak and tired. Who wants to cook and clean when they are very tired? Not me. We had a lot of help with cooking from family; but the days we didn’t have help, we ate out. If I wasn’t worried about our health, I would have ordered pizza every day.

Too many late fees: I missed two credit card bills. Adding the late fees and the interest, it would have cost us a pretty penny. As I am usually very diligent in paying my bills, the credit card companies removed all the charges and didn’t report me to the credit bureau.

Shopping hastily: I love to shop. I don’t usually shop in a hurry. I make a list, look for the best deal and won’t buy anything without letting it stew on my list for at least a few weeks. But when I reflect on my shopping habits these past three months, I see how much I have wasted. I felt there was very little time for any research, so I bought the first thing I saw. I knew I didn’t have much time outside the home, so I bought stuff without taking the time to evaluate. I used shopping as my stress reliever as evidenced by my credit card bills.

Making bad decisions: We make thousands of decisions every day, including plenty of important financial decisions. I usually buy and sell a few stocks at the end of the year. This year, I didn’t. If I had, I am pretty sure I would have made bad decisions. Sleeplessness causes stress. Researchers have found that stress can make people, who are usually responsible with their money, to choose riskier and not well-thought-out options.

Poor judgment: There is a reason why one should not drive or operate machinery while intoxicated. Alcohol impairs judgment. Studies have shown that sleep deprivation is as bad as alcohol. If you get only five hours of sleep a night for one week, the impairment level is equivalent to a blood alcohol level of 0.1 percent, which is legally drunk in all states. It is irresponsible to drive in a sleep-deprived state; it not only endangers the person driving but puts others in danger as well. Even if you hit a tree, imagine all that you have to go through dealing with insurance, not including the increased insurance rates for several years to come.

Decreased productivity and poor work performance: Knowing my due date ahead of time, I finished all my freelancing tasks and kept my schedule open for three months. If I had not done that, I can easily see my productivity level touching zero. Anyone working a regular full-time job would not have been able to pre-plan so much. By not sleeping and being very tired, they would definitely not have put their best foot forward at work. They take longer to solve a problem and may not be good communicators with their co-workers. Unfortunately, many people think they can get ahead by working longer hours and giving up their sleep. That is not true. Even one night’s sleep loss impairs innovative thinking and flexible decision-making. This could definitely affect their bonus or salary increases and could have lingering negative effects on their career development.

These doesn’t even touch upon the long-term effect sleep deprivation could have on one’s health — more medical bills due to lack of exercise, obesity and stress.

The solution to this is pretty simple — get a good night’s sleep. We are always running. Life has become too busy; but for the sake of our health and finances, we have to make a sincere effort. For new parents, sleep deprivation is unavoidable. For others, we can try to improve our sleeping habits for the sake of our financial future.

  1. Relax before you go to bed so you fall asleep sooner. Avoid late night TV. Instead, opt for a relaxing bath or read a book.
  2. Exercise. My husband attributes his great sleep habits to his exercise regime. He says his sleep suffers if he doesn’t exercise for a few days. Exercise reduces stress and helps us relax.
  3. Slow down and take a breather.

Don’t take your sleep for granted! The National Sleep Foundation recommends at least seven to nine hours of sleep. How much sleep do you need to function at your optimal level? Have you felt the effect of sleep on your finances?

Published on February 3rd, 2014
Modified on February 1st, 2014 - 6 Comments
Filed under: Family & Life, Productivity, Working

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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6 Responses to “Lack of sleep costing you a fortune?”

  1. 1
    Nick | Millionaires Giving Money Says:

    I always try to get a good nights sleep as I know I can be 10 times as productive if I don’t. Sleep definitely affects the memory, like you I’ve missed some bill payments through sleep deprivation. Now I strive for 8 hours. Good post, thanks for sharing.

  2. 2
    Paul Says:

    Of all the personal finance articles I have read, this is the first to address sleep in connection with money. Very interesting.

  3. 3
    Michael Says:

    “Many of us need more sleep” In fact everyone can sleep 6 hours per day or even 4,5 hours per dar. It is called polyphasic sleep, you can read about it in internet and it takes aroun 2-3 weeks to achieve this skill.

  4. 4
    Matt Says:

    Sleep is important, that much has been obvious but this is the first time that I’ve read it with relation to finances. I would have to agree whole heartedly. Its amazing that new mothers can even go back to work as quickly as they do.

  5. 5
    Roger Says:

    The best sleep is when: A. Eat a large breakfast,
    B. For lunch fish/chicken vegs+fruits now
    for Dinner: Do not ever eat after 6 pm and have a
    very small meal. You will sleep like a log and will
    feel fine when you awaken. Try it – it works !!

  6. 6
    Mike Davis Says:

    Great topic to write about. Lack of sleep and trying function is such a cultural norm these days.
    Great to see it addressed here!

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