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Past theory and research in medical sociology has frequently focused on the association between financial strain and physical health across the life course. However, the direction of effect between these two variables is still unclear. We help to clarify the relationship between these variables by conduction formal tests to identify the leading indicator in two independent samples of mid- and later life adults. Results from both samples provide some evidence that financial strain is the leading indicator. We find no evidence that physical health is the leading indicator or that this association is completely bidirectional. Implications for theory and future directions for research are discussed.