Lowering financial stress and stress in general

Lowering financial stress and stress in general

Lowering financial stress and stress in general.

Financial stress is debilitating; it can add a layer of unwelcome, even toxic, distraction to everyday life.

It can affect our relationships and our productivity at work; plenty of research shows this, including research commissioned by financial mindfulness.

But people under financial stress don’t need research to confirm it, anyone under financial stress knows how it slows us down and makes everything that bit harder.

Financial mindfulness is a tool for reducing personal financial stress using mindfulness, goal-setting, and financial literacy.

“It’s useful to remember financial stress is a type of stress – and it’s helpful to look at what stress actually does to us,” says Dr. Michael Takagi, a Melbourne clinical neuropsychologist.

It’s also important to remember there are a variety of well-practiced stress reduction techniques which we can use to help address financial stress too.

Stress and financial decision-making

Stress can have a profound impact on us, Dr. Takagi says.

When it becomes chronic, it can adversely impact our lives in many ways, including our sleep, cognitive functioning, physical wellbeing, and overall health.

“Imagine trying to make a complex and impactful decision when you are sleep deprived, your scatterbrained and not able to focus, you have a headache, and your back is sore, and you feel rundown and exhausted,” Dr. Takagi says.

“It is not a recipe for good decision making.”

In the short term, we are more likely to make decisions that alleviate our immediate need for relaxation and help us to feel better, so-called retail therapy, buying expensive takeaway meals, drinking, or even gambling.

Doing those things to try and ‘feel better’ can add to our financial stress.

“In the long term, we are less likely to delay gratification and less likely to make the decisions that are necessary for long-term financial stability,” Dr. Takagi says.

Stress management techniques can help us reduce our overall stress levels, reducing the adverse side effects of stress, which helps us make better financial decisions.

Valuable activities for stress reduction

In general, exercise is among the best options, Dr. Takagi says.

The specific type of exercise is less important than ensuring you regularly do it. As an example, gardening can be a good option that people may not consider exercise.

While gardening doesn’t usually raise the heart rate, many people find it useful – you’re outside, getting fresh air, and exerting yourself.

These activities produced stress-reducing brain chemicals such as serotonin, dopamine, and endorphins, where you exert yourself.

“Going for a walk with a friend is another excellent option; you’re exercising and socialising at the same time,” Dr. Takagi says.

Socialising with a trusted friend produces stress-reducing brain chemicals such as oxytocin.

Similarly, team sports, going to the gym, and running are all good options.

The primary considerations should be enjoyment and a degree of physical exertion, which produce the feel-good natural highs of dopamine and serotonin.

“If you enjoy doing something, you’re more likely to make it a part of your routine,” Dr. Takagi says.

Including someone else can help too – you’re more likely to exercise if there’s someone to do it with you, keeping you accountable with the bonus of that important social aspect.

Mindfulness is also an excellent stress reduction technique, particularly with stress caused by financial stress.

Mindfulness has been shown to stimulate all the ‘happy’ brain chemicals, especially serotonin and (when we stick to a regular practice) dopamine.

The anti-stress benefits of positive routines

Stress reduction techniques and activities do not have to take a huge part of the day, and they can change, Dr. Takagi says.

This could be incorporating a morning walk into your routine a few days per week, a 10-minute mindfulness session before you start your day, or a 5-minute progressive muscle relaxation session before you go to bed.

“The most effective stress management techniques will vary from person to person and vary on when they are most effective during your day,” says Dr. Takagi.

“Identify the stress management techniques that are most effective for you (e.g., breathing exercises, mindfulness, walking) and then work on incorporating them into your routines,” he says.

This means getting curious about what works for you. Try something and if it doesn’t help reduce your stress, try something new.

You can maximise the benefits of stress management techniques and activities by incorporating them into a routine and continuing to do that routine.

We need to simplify how we do this, and one way to achieve that is to do positive things at the same time every day.

Many people find it effective to have a stress-reduction routine in the morning while having plenty of energy before their focus is taken up by work.

This could look like some meditation and a phone call to a friend when you get up, or a brisk 15-minute walk, then you begin with a firm foundation for the day.

But if it works best for you to have a stress-reduction routine after work or in the evening, then try and stick with that.

The main point here is to have a routine and try to stick to it. If you miss a day, don’t worry, just start the next day again.


    • Financial stress can be reduced in several ways.
    • A program specifically aimed at reducing financial stress is beneficial.
    • Financial stress is a type of stress, and there are many stress-reduction methods.
    • Exercise is one of the best, so is socialising and mindfulness.
    • Experiment and get ‘curious’ about what works for you.
    • Incorporate stress-reduction techniques into your daily routine.

How can we reduce mortgage stress

Top five reasons people get into mortgage stress

How can we reduce mortgage stress.

Despite sustained, record low interest rates, repaying a mortgage remains one of the most significant financial stressors for many Australians.

According to Moody’s Analytics, 20 percent of all Australian households are said to be under mortgage stress in Australia.

Government figures record just over a third of Australian households has a mortgage.

Considering the size of those mortgages, it’s hardly a surprise that the debt stresses us out.

ABS data shows the average mortgage across Australia is $728,500.

In NSW, it is $939,700 and in Victoria, it is $785,000.

Types of mortgage stress

At this point, it is important to define mortgage stress.

Mortgage stress is a technical term describing spending more than 30 percent of income on mortgage repayments.

That is the type of mortgage stress Moody’s refers to above.

However, another type of mortgage stress goes along with the technical definition and is real and consistently impactful on people.

This is the mental and emotional pressure of financial stress caused by being fearful, even panicking, about what might happen if your household could no longer afford the current mortgage repayments.

Why does mortgage stress happen

In short, the size of mortgage debts – for many Australians, it is the most significant loan they will ever repay.

When households are squeezed into paying over 30 percent of income towards meeting mortgage repayments at a low-interest rate, even the merest hint of a change in interest rates causes physical and emotional stress.

Don’t forget how the emotional significance of owning a home – and the fear for some of losing one – it’s a heavy burden for a lot of hardworking Australians.

As interest rates have remained low, mortgagees have become used to their repayment levels, meaning any increase in interest rates will only exacerbate mortgage stress.

“I think what is important though to realise that whilst most people are currently coping with their mortgage repayments, there is still a lot of anxiety about the future with regards to possible interest rate rises, security of employment and property prices becoming unaffordable or property prices going backwards in the future,” said Hamish Ferguson, Director of Vision Property and Finance.

How can we reduce mortgage stress

There are several successful methods of reducing mortgage stress. They include:

  1. Ensuring you are paying extra on your mortgage to build up a safety net or buffer which can be used when interest rates rise;
  2. Fix your loan if you are worried about rates going up and only have a small weekly surplus to your budget. This way, you won’t have to concern yourself with increased repayments for the time frame you have fixed for; and
  3. Review your expenses. Often when we are stressed, our level of comfort spending increases. We need to be aware of this and monitor our spending on those items that we tend to purchase when we are stressed. Eating out, TV subscriptions, buying gifts for ourselves or others, and upgrading items such as mobile phones, TVs, cars, and fashion.

How can we stop mortgage stress derailing our finances and relationships

What if we can’t eliminate our mortgage stress. How do we stop it from taking a heavy toll on our lives?

Perspective is so important. If we focus on the negative, on the difficulty of financial strain, then our relationships with money will remain challenging.

An example might be rather than saying ‘I don’t have enough money’. Instead, try to say, ‘well, at least I am still able to meet my commitments.

When it comes to relationships and money, transparency and openness are essential.

We can’t stress enough how important it is to ensure you are communicating with your partner and family and not bottling up worries and problems.

Being mindful of money goes hand in hand with good communication.

As we touched on, so much of the mortgage stress equation is about acceptable margins. Small changes – either way – in interest rates can have a significant impact.