The link between financial wellbeing and mental health
These are tough times for everyone but those suffering financial stress are facing an additional challenge as this is something that can adversely affect our overall wellbeing and mental health.
The Australian Psychological Society found issues around our personal finances are the main sources of stress, with debt having a very strong impact on a person’s wellbeing. Those without any financial issues tend to have good mental health, while those suffering financial stress can find themselves in a downward spiral that affects both their physical and mental wellbeing.
Symptoms of financial stress
Financial stress occurs when we are consumed with worry about money. A common fear is not being able to meet mortgage payments. Some of the signs of financial stress include arguing about money (particularly with your partner), difficulty sleeping, mood swings, and increased use of alcohol or other substances.
Even before the pandemic, there was an increased focus on financial wellbeing with people’s work life becoming less stable as a result of the gig economy and more people moving into self-employment.
However, financial wellbeing is less about how much money you have and more about the feeling of being in control of your finances. We all want to be able to deal with long-term goals such as paying off the mortgage or having a comfortable retirement, but we also want to be in a position where we can deal with any expenses that come out of the blue, such as via a job loss or ill health that causes our income to fall.
Factors that affect our wellbeing
Benestar’s acting National Service Delivery Manager, Critical Incidents, Davide Musolino, says when people have positive financial wellbeing, it can be correlated with positive wellbeing and good mental health but it’s not a given.
“There are a number of factors that have an impact on a person’s mental health and wellbeing,” he says. “These can include poor general health and relationship breakdowns so financial stress isn’t always a cause of poor mental health: it can be one component but it is specific to certain individuals.”
Financial stress does lead to people feeling vulnerable and unsafe, Musolino says, because a large part of how we live our lives is determined by our finances.
“Therefore, if your finances are stretched and you feel financially vulnerable, then all aspects of your life are open to becoming vulnerable and stressed. Our finances facilitate a lot of our life, so if that structure is weakened then that flows into all other aspects of our wellbeing.”
When we are under stress – whether financial or otherwise – our overall functionality reduces and we tend to focus on our core needs, such as safety, rather than our peripheral needs which aren’t necessary for survival. Musolino says people in the workplace suffering from stress are more likely to find it difficult to concentrate, to engage normally with colleagues, or perform at high levels.
How to regain control
Financial stress can be managed at an individual level in a number of ways. “When you talk about stress broadly there are a number of things that can be done to reduce it, such as eating well, exercising, and connecting with your loved ones,” Musolino says. “With financial stress it’s important to have more of a targeted self-care plan. You will likely get your best support from a financial counsellor and there are a number of financial aid services available that can help with activities such as debt consolidation or establishing savings plans.”
He adds banks also have hardship departments so anyone that needs financial assistance might want to consider linking into their support services.
Workplaces can also assist employees experiencing financial stress by offering appropriate services. “These can include financial counselling support services that make staff feel safe and secure or offering flexibility around taking leave,” Musolino says.
Some simple steps you can take to regain control include:
Unfortunately, the current situation around the pandemic is likely to continue for some time, and an increase in the number of mental ill-health episodes resulting from financial stress is likely. It’s important to be proactive with your finances. A visit to your financial adviser can put you on the right path by helping you implement good financial behaviours.
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