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Managing Financial Stress Effectively

What is Financial Stress

Financial stress is defined as ‘a condition that is the result of financial or economic events that creates anxiety, worry, or a sense of scarcity, and is accompanied by a physiological stress response’.

Whether you are worried about your retirement, debts, or your children’s future, financial stress is a particularly complex and destructive form of stress that can significantly reduce levels of well-being and health.

Impacts of Financial Stress

Costing the Australian government $42 billion per year, financial stress has been linked to reduced employee performance, increased sick days, as well as increased risk in developing mental health issues such as depression, anxiety, eating disorders, and substance abuse disorders. Furthermore, financial stress has also been linked to an increased risk of obesity, heart diseases, Irritable Bowel Syndrome and chronic pain.

Two million Australians are experiencing severe or high financial stress, while a further ten million are living with some level of financial worry.

Less than half of Australian adults are considered financially ‘well’, one in three workers are in serious need of financial improvement, according to the Financial Wellness Index from The Workplace Super Specialists Australia (WSSA).

Spotting the Signs and Symptoms

If you are experiencing financial stress, you may experience the following.

  • Persistent thoughts or worries about your finances
  • Low motivation, low energy, and hopelessness
  • Feelings of loss, anger, confusion, and sorrow
  • Disconnection from others and their surroundings
  • Erratic sleep patterns or difficulty sleeping
  • Difficulty concentrating, focusing, or feeling present
  • Substance dependency e.g., alcohol abuse
  • Over-eating or under-eating
  • Feelings of overwhelming stress and panic
  • Physical symptoms, such as tension, nausea, pain, and gastrointestinal problems.

Uncovering the Pain Points

Financial stress can be triggered by many different types of events. You may feel stress because of:

  • Compulsive spending or gambling
  • Bankruptcy
  • Saving for retirement
  • Single parenthood
  • High levels of debt and insufficient funds to pay off the debt
  • Unexpected loss of income or assets
  • Differences in spending habits or values between people who share income
  • Increases in financial responsibilities, such as costs associated with caring for a new child or sick family member.

Tips to Manage Financial Stress

Assess your Financial Situation

Take time to assess your current financial situation, particularly focusing on your triggers for financial stress. 

Create a Financial Plan with Clear Goals

Find ways to reduce your expenses, such as contacting your insurance providers to find better deals. Get on top of your debt by contacting your bank or credit card provider to set up an affordable payment plan. Use apps and online tools to help track progress. 

Review the Plan Regularly 

Set time aside to review your financial situation and how the plan is working. Be willing to change the plan dependent on needs

Planning and regular check-ups has been found to improve accountability and reduce financial stress

Make One Financial Decision at a Time 

Research has found that spacing out financial decisions improves individual’s willpower and reduces associated levels of financial stress

Identify what Triggers your Financial Stress

Do you feel more stressed around pay day, tax time, or Christmas? Identify when you feel more stressed about money so that you are able to plan ways to manage this financial stress during these times. You might prepare financially for these times, ask for support at these times, or find outlets for your stress

Recognise How you Deal with Financial Stress

Do you want to bury your sand the moment money is mentioned? Or maybe you try to watch every penny when your stressed about money which leaves you feeling suffocated and trapped? 
However you currently deal with financial stress, acknowledging this to yourself is a crucial step as you can identify what strategies are helpful or not helpful. 

Find Effective ways to Manage Financial Stress

Once you notice these stress reactions, try to think how you might be able to manage your stress in effective ways for yourself. You might choose to reach out to a friend, exercise, or journal, for example. 

Find Support

Financial support is a free service offered through your Employee Assistance Program which can give you the confidence and help needed to reduce your levels of financial stress. 

If you would like further information or support regarding helping manage your financial stress, please call Acacia. 

If you or someone close to you needs support, contact Acacia Connection for an appointment.

P: 1300 364 273 | Text or Live Chat: 0401 337 711 | W: acaciaconnection.com