Jen Harwood has learnt a few key lessons from dealing with her financial stress.
“My biggest message to anyone paralyzed by a financial mess… You are not your debt, this isn’t permanent and you are capable to building a new life! Ask for help, accept it and start taking steps every day and soon, you will be moving onwards and upwards.
Financial issues rate as one of the top causes of stress and anxiety for Australians.
“With an increasing set of demands on us such as less family support, more travel, greater social media demands and comparison with others, as well as greater social pressure to eat out, financial anxiety is a common problem for many Australians,” says Dan Auerbach, Psychotherapist with Associated Counsellors & Psychologists.
As we approach the end of financial year, many households will be assessing their financial situation and they’ll be doing it against soft economic outlook.
As it stands wages growth is running below average, business conditions are weak and the housing market boom has been in a slump.
All of these factors have been weighing on household confidence with the latest Westpac-Melbourne Institute consumer sentiment index 0.5 per cent below where it was a year ago.
An estimated 2.1 million Australians experienced some form of financial stress in 2018, according to the Financial Resilience in Australia 2018 report.
The same report also found that more Australians were feeling financially secure in 2015 (35.7%) than they were last year (33.9%).
Indeed a 2015 study conducted by the Australian Psychological Society (APS), titled the Stress and wellbeing in Australia survey, found that 35 per cent of Australians reported a significant level of distress, and peaking levels of anxiety symptoms.
A year later the Westpac Financial Inclusion Action Plan, also revealed that 64% of Australians said they were facing some level of financial stress or vulnerability.
In the economic environment Lali Wiratunga National Manager, Westpac’s Davidson Institute says financial stress may increase.
“Currently we are in a low interest rate environment but despite this the Salvation Army reports that one in five Australians are worried about their finances.”
It’s that feeling of being constantly worried about money, that Jen found debilitating.
It was four years ago, that Jen became a single mum at 43 years of age when her only child was 2.5 years.
“The process of leaving an abusive relationship left me with no cash or resources, and over the next two years I accumulated debts on three credit cards of about $50,000.
“I worried constantly about money, and I was constantly worried about paying rent and buying food. I was down to basic survival mode. I wasn’t able to think straight or be creative. I couldn’t solve problems or create solutions because I was paralyzed.”
Mr Auerbach says that financial stress is one of the most commonly citied forms of anxiety.
Some of the most common symptoms of financial stress include:
- Ongoing worries about money.
- Feeling like you have to improve things or do things differently.
- Repetitive thoughts or worries.
- Lack of sleep and insomnia.
- Stomach aches.
- Experiencing moments of dread and panic attacks.
- Increase or decrease in appetite.
“There is a great deal more financial anxiety for people struggling to make ends meet with their financials but equally people who are in a good financial position can still experience financial anxiety,” says Auerbach.
“Financial anxiety can also be a disorder which is not necessarily related to reality.
“This means it is not always aligned with the actual energy needed to achieve the outcome and it is often a circular feeling of being unsafe that dominates ones thoughts.”
How to identify the common types of financial stress
Three of the most common types of financial stress according to Mr Wiratunga include.
- Intergenerational stress. Where a person’s attitudes and experiences with money is affected by their upbringing.
- Debt related stress. For example this could be where a person is worried about not being able to pay off their credit card.
- Investment related stress. Where financial investments such property and shares cause money worries. For instance someone who may have brought property last year at the height of the market may be worried about the value of their property as prices correct.
Wiratunga says financial stress is often perpetuated by people ignoring it or not taking action, or by becoming “overtly analytical.”
For Jen, it took her many years to confront her own money worries.
“The majority of paying off my debts has only happened this year as it has taken me three years to get the momentum up emotionally, mentally and financially to simultaneously pay for my life and also pay off the debt. Clearing debt doesn’t happen fast.
“It actually wasn’t until our childcare facility manager spoke to me about being four weeks late with my child’s fees and she asked me to send her my bank statements that my situation changed.
“I then started talking to my accountant and a debt specialist, Debt Angels Solutions, who helped me put $1500 a month in credit interest on hold for two of my three credit cards for 18 months.
“I have learned so much more about money and the value of money through the process.”
“I even started a number of side gig businesses over the last few years to try to help my financial situation.
“I now manufacture and sell hair brushes. I know, it’s the craziest thing and yet, our brushes work. It’s called HappyHairBrush.”
Seeking professional help with financial anxiety can greatly improve a person’s mindset and mental health.
Mr Wiratunga says following steps can also help reduce financial strain.
- Get in control. Reflect at what is causing the anxiety or stress and get in control of it.
- Adopt the right mindset. Henry Ford once said, “Whether you think you can, or you think you can’t – you’re right,” Positive self-talk around getting in control is really important.
- Think about what is realistic and achievable. Consider what you can do and set yourself a goal or timeframe for paying things off.
- Make the most of what’s available to you. Think about your income and how you can best use that to make more money or develop a side-hustle.
- Take steps to stay on track. There are a lot of freely available tools to help you better manage money such as Pocketbook or even Excel.
- Have a support network. The other part of this is having a supportive tribe of family or friends, or even getting the help of a financial coach, counselor or psychologist to get you back on track.
This Financy article was first published by WestpacWire and it has been republished here with permission.