Are your finances making you sick?

Take Control of Your Finances and Kick That Financial Stress to the Curb

Many of us are experiencing financial stress, and it’s impacting our overall mental and physical health and wellbeing. Read on for some tips and resources to take back control.  

What is Financial Stress?

Financial wellbeing is critical for overall mental health and wellbeing. According to Thriving Wallet, we know that poor financial wellbeing impacts physical and psychological health, mood, work satisfaction, sleep and relationships.

However, even though nowadays we’re spending more time working, for the first time since 1930 we’re earning less relative income than those who came before us. We also have less financial security.  At the same time, in many countries, costs for necessities like food, healthcare, housing and education have skyrocketed.

Money is the #1 stress for people in the U.S.¹

This lack of financial security is causing huge amounts of stress, and more than that, it’s impacting our wellbeing more broadly. A recent study in Canada looked at the importance of financial satisfaction for overall life satisfaction. They found that for financially stressed households, their financial stress overwhelmingly conditioned their overall sense of life satisfaction. ² In short, they were less happy and satisfied with their lives.

What Financial Stress Looks Like

Those who earn the least in society are often living in a constant and overwhelming state of financial distress. The Salvation Army’s annual survey shows that the poorest people in Australia experience extreme housing stress, face multiple barriers to finding work and struggle to maintain a basic standard of living. At times, they are unable to feed themselves or their families, and most upsetting, children continue to be deprived of basic necessities due to the lack of economic resources. This financial hardship means that children miss out on educational opportunities and activities at school and many don’t have access to technology or the internet at home. This is despite respondents often saying that they would ‘go without’ so that their children did not have to do so.³

Meanwhile, around the world for the Millennial generation the wealth gap continues to increase, and many millennials have huge university debt, no prospects of ever buying a house, and they probably won’t be able to retire until they’re 75 years old.

According to Credit Swiss: “The Millennials (people who came of age after the turn of the century) have not been a lucky cohort. Not only were they hit at a vulnerable age by the global financial crisis, its associated recession and the poor job prospects that followed, but they have also been disadvantaged in many countries by high house prices, low interest rates, and rising student debt making it difficult for them to buy property or accumulate wealth.”⁴

When Things go Wrong

If you’ve had a sudden or unexpected change in your circumstances, like losing your job or having a health emergency that prevents you from working, and you’re experiencing financial stress, the sooner you start working with support groups, the better.

Often times, sticking your head in the sand and hoping it will all go away can make problems worse and things can snowball quickly. The key is to reach out to support organisations as early as possible. Organisations like The Salvation Army have people available to speak to you if you’re struggling.

Taking Control of Your Finances

Reading Resources

Thankfully, many people are starting to talk about financial stress and financial wellbeing, and there are a range of resources you can now access.

For a great read and to learn a bit about your spending and saving mindset, check out the classic book: Rich Dad, Poor Dad.

You can also download the Thriving Wallet research insights report / white paper, which has some good stats about the issue (you’re not alone!) as well as some practical micro-steps you can take.

Online Tools to Manage Financial Stress

The Commonwealth Bank has a range of resources for you to assess and then manage your situation. They believe there are 3 ways you should be looking at your overall financial wellbeing:

1. Every day: Managing your day-to-day finances.
2. Rainy day: Being ready for the unexpected.
3. One Day: Making your one day goals a reality.

They also have some great free resources for things like making budgets (and how to make sure you stick to it!), ensuring you only spend within your budget, and learning how to pay off your debts. Although some things (like their customer app) require you to have a product with them, the site is still really valuable and for most resources you don’t get a hard-sell, which is nice.

NOTE: For full disclosure, I used to work at the Commonwealth Bank – which is why I know about their Financial Wellbeing site. But please note that I am not receiving any payment from them for this post, I just believe in the advice and resources they’re providing.

Dealing with Stress

Remember throughout it all that there are science-backed activities you can do to better manage your stress and build your resiliency. Check out the posts under the below topics for some ideas on how to manage your stress, or speak to a professional.

Community and Connection: Connecting with others and contributing to your community are proven to build emotional resiliency and make your life happier. It is so important not to neglect this part of your life, especially if it doesn’t come easily, like when work is really busy or if you’re a natural introvert.

Health and Wellbeing: Your health and wellbeing is critical to your happiness. Luckily, there is a wealth of information about how to make small changes to your life to make it healthier and improve your wellbeing.

Meaning and Purpose: Having a sense of meaning and purpose in life is critical to resiliency and living a happy life. You need it to thrive and flourish. It’s about having a reason to get out of bed in the morning, setting goals and having commitments. Some lucky people get that purpose through their job, but many of us get our purpose through other activities such as volunteering, learning or experiencing new things or caring for others.

References

1. “The Thriving Wallet, research insights report/white paper.” Page 1. https://content.thriveglobal.com/wp-content/uploads/2020/02/Thriving-Wallet-Research-Insights-Report.pdf, accessed February 2020.
2. Brzozowski, M. & Spotton Visano, B. J ““Havin’ Money’s Not Everything, Not Havin’ It Is”: The Importance of Financial Satisfaction for Life Satisfaction in Financially Stressed Households.” Happiness Stud (2020) 21: 573., https://doi.org/10.1007/s10902-019-00091-0, accessed February 2020.
3. The Salvation Army. “Feeling the Pinch: National Economic and Social Impact Survey, 2018.” https://apo.org.au/sites/default/files/resource-files/2018/11/apo-nid204626-1240541.pdf, accessed February 2020.
4. Credit Suisse. “Global wealth databook 2019.” Page 141. https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html, accessed February 2020.

NOTE: This is not financial advice. It is intended to provide generalised, educational information. I do not know your financial situation or needs, and you should not rely on this information as financial product advice.