Money and relationships

Many elements can lead to relationship tensions and even breakdown.

One of the most difficult to change can be disputes or differences over money.

Perhaps strangely, often ‘opposites’ attract when it comes to money and relationships.

“You’ll often see a spender/saver dynamic in a couple,” says Lea Clothier, a Behavioural Money Coach.

The reason for this can be based on deeply set value systems. Money can be tied to, for example, freedom, security, or success.

“Money can represent all three to us, but we often have a dominant main value system around it,” says Ms Clothier.

Value systems and money

Understanding the underlying values in your relationship will give us insight into our behaviour and what is happening when there is tension over money.

Someone who sees money as a means to freedom is likely to be more of a spender, Ms Clothier says.

They are also less likely to stick to or use a budget (which they find restrictive). They may enjoy spending money on experiences and enjoying life.

On the other hand, someone who sees money as all about security may use their money more restrictively.

They are likely to be more savings-focused, manage money more tightly, and stick to a budget.

‘For these people, having a cash reserve gives them peace of mind and reduces financial anxiety,’ Ms Clothier says.

Those who see money as a measure of success may display their wealth through their choice of career, the car they drive, and the clothes they wear.

They may have big financial goals and see money as the tool to achieving these, Ms Clothier says.

Money is likely to be at the centre of or influence many of their major life decisions.

Conflict over money

Four in ten Aussies in a relationship have experienced financial stress in the last 12 months, and women are suffering more, 45% compared with men at 37% according to the February 2023 research conducted by

Nearly half (45 per cent) admitted it had negatively impacted their relationship.

Specifically, a third (34 per cent) admitted their relationship had been negatively impacted, while 11 per cent indicated it had not only had a negative impact but had caused them to discuss breaking up with their partner.

Conflict can happen in partnerships and relationships when people have conflicting money values.

Imagine a relationship where one person is freedom-focused and the other security-focused.

The actions one person takes could be seen to compromise the other’s need for freedom or security.

Where money values are fundamental to us and clash with someone else’s equally strongly held beliefs, conflict seems inevitable at some point.

Understanding each other’s values around money can help reduce conflict and diffuse conflict.

“Many couples don’t manage money together as a team,” Ms Clothier says.

Getting ‘on the same page’ financially means both are taking an interest in finances in the relationship. Ideally, both also have an active role.

Ultimately a shared household spending plan is a great idea, so both partners work together towards joint financial goals.

Keeping some financial independence is also a good idea, perhaps in the form of having a small amount managed separately, so each can choose to spend independently of common money goals and actions.

But this should be transparent: any habit of hiding money will undermine trust.

Financial stability, relationship stability

Financial stress and financial instability are leading causes of stress globally and often contribute to marital and relationship breakdown.

Improving our sense of financial security and stability provides peace of mind and invariably helps to steady many partnerships, Ms Clothier says.

“It can create a platform for individuals to pursue their dreams and for a couple to achieve shared goals,” she said.

Financial stability is also the foundation for a stronger financial future and makes goals and dreams more affordable.

Financial stability is created through two essential elements: communication and cash flow, Ms Clothier says.

Money is a very emotional topic, which can make communicating about it difficult.

Learning to be open and transparent about money matters and communicate clearly about them is essential to remove the tension that money often causes in relationships.

Managing cash flow is the foundation of all financial plans.

“It’s about being mindful of every dollar that flows into your life and intentional with the very dollar that flows out,” says Ms Clothier.

When we have a system and process in place to manage our cash flow and ensure we are spending less than we earn, paying off debt as quickly as possible and building a cash buffer, we can begin to focus our attention on growing our wealth investing it.

Many people go straight to the investing part, only to find they are building on a shaky foundation.

If you are doing this, seek some help getting your fundamentals right – improving your cash flow situation to spend less than you make.

The dealbreakers of money and relationships

A major dealbreaker regarding money that will undermine a relationship, perhaps surprisingly, is poor communication.

Even worse is lacking transparency – which to a partner can quickly erode that most important element in any partnership: trust.

This applies to all stages of a relationship – including the beginning of one.

A partner with an undisclosed historical debt is a partner with a burden that can harm a relationship.

Hiding purchases and spending habits and having secret stashes of money will also destabilise a relationship.

Teamwork and shared responsibility regarding joint finances are essential. It’s constructive, but its absence is a big negative.

Working together on a joint budget, a spending and saving plan builds a sense of partnership – and trust because the goals are shared. Both partners can enjoy the feeling of achievement that comes from successful planning with structure and clarity.

If there’s debt, work out a debt management plan either together or with complete transparency.

“Lacking a plan means that our finances often control us, rather than us controlling it,” Ms Clothier says.

“It also means we are less likely to achieve our goals and dreams because we don’t have the means or method to achieving them.”

Another huge dealbreaker is procrastination.

So many typical money milestones fall on a particular date, so that that avoidance can be very costly.

So don’t put off paying the credit card bills or the insurance – that will create tension in a couple and family.

This also applies to investment. The saying goes: the best time to invest is yesterday and the second-best time is now.

Some regret over financial behaviours and decisions is inevitable and painful, but communication over shared goals can help prompt action rather than avoidance.

Another look at communication

In countries where the cost of living is high, money is one of the most emotive regular topics we face.

Shame, guilt, fear, anxiety, jealousy – all big emotions – are all common around money.

We can feel anger, too and even slip into useless or even damaging fantasies over finances.

And most of this happens in one place – inside our heads.

Learning to be open and transparent about money matters and communicate clearly can remove significant triggers for tension and disagreement.

It’s important to remember that a lot of financial behaviour is habitual.

“Most of us don’t bring much awareness or mindfulness to what we do with our money on a day-to-day basis,” Ms Clothier says.

Our money habits, particularly negative, can be detrimental to our finances and cause conflict in a relationship.

If you or your spouse notice some unhelpful financial behaviours, it’s important not to launch into judgement, blame or attack. Instead, offering support to see what is driving the habit or behaviour is more beneficial.

It’s important to explore – with honesty – if there are ways that one or more bad money habits, we have either individually or as a couple could be reduced or replaced with something healthier.

Suppose money is a source of regular conflict in your relationship. In that case, it may pay to consult with a financial counsellor, money coach or financial adviser who could support you to get back on the same page with your finances.

Often, they can provide perspective, an objective view, great support and practical tools to work together and master the art of managing money as a couple.

It’s important to note again that money challenges can reveal significant underlying issues, such as the need for security, freedom, or success.

Suppose the behaviour of one or other partners in a relationship is controlling or obsessive in pursuit of these values, leading to major relationship clashes. In that case, marriage counselling or couples therapy might also be helpful.

New Year’s Resolution

If you made a New Year’s Resolution, was it geared towards your financial wellness?

If it wasn’t, or you didn’t make one at all it’s not too late, in fact it’s never too late.

Thankfully today experts understand there is a powerful correlation between our financial wellbeing and our general wellbeing.

We know that toxic levels of financial stress impacts us in many different ways, it affects our relationships, our self-esteem, our social life, our productivity at work, even our physical health.

That’s why it’s appropriate to set New Year’s Resolutions for our finances — and also our related behaviours.

There’s every chance 2023 will be another tough year as the cost of living, and interest rates rising to uncomfortable levels.

One well accepted method is to introduced measurable positive goals for the year ahead.

Tracking our progress helps return some sense of control, and leaves us better able to deal with what happens as it happens.

Here are some suggestions to help you kick off 2023 in a positive way.


A great way to break through the murkiness of money problems is to answer some simple no-nonsense questions.

Even if it’s a little scary, you should be clearer afterwards and probably more motivated too.

So wherever you keep track of important inventories in your life – be it a journal, diary, planner or an app, answer each of these questions:

    • Are your savings going up or down? What direction are your finances are headed in?
    • Have you had trouble paying basic bills and/or making normal repayments?
    • What are your financial goals and do you fully understand your finances?
    • Are you ok with being in the same position financially a year from now and five years from now?
    • Do you ever feel distracted because of your finances, including during work hours?
    • How often do you impulse spend on things you don’t need and/or aren’t healthy for you? When did I last do this? How many times in the past month has this happened?
    • Are you financially healthy but feel stressed and/or down about it anyway and why is that?
    • Do you ever experience conflict or feel anger because of your finances?
    • What steps are you taking to address your financial issues? If none, what is holding you back?

Spend at least thirty minutes on this and try to share the answers with someone you trust.

Write down at least one key action point after each answer. Give yourself a date to try and get that done.


“Spend less, save more” is on just about everyone’s list of New Year’s Resolutions, every year.

It’s a great goal, but a more specific objective that will help you work towards that goal is to carefully track all your spending – on a daily basis.

Use an app, a spreadsheet or write it down on paper. Whichever method suits you best, just make sure it’s a full record of spending.

Do it for a week, perfecting it, then keep doing it for a month.

Clear patterns will emerge which will help you to keep a realistic budget.

Keep doing it – this is one of the best habits anyone who feels financial stress can build.


There are just too many distractions in the world today.

To have any hope of living more mindfully, and sustaining financial resilience and overall wellbeing, we need to reduce the white noise in life.

Here are some suggestions:

    • Reduce your social media use. Cut back and make the time you spend on social media more meaningful. For example, congratulate friends on life events and achievements instead of getting dragged into debates. Post pictures and stories of something you are proud of. If you really struggle with social media, turn off notifications and set digital wellbeing timers;
    • Be wary of online news.There’s an old saying that still holds true in the news business: if it bleeds, it leads. News organisations have a vested interest in bad news and scandals and that cannot be good for anyone’s state of mind. Be aware of that before you click: news sites count on a natural human curiosity to witness dramatic events;
    • Plan your distractions. It’s ok to switch off and escape mentally for a while, in fact it’s essential with the pressures in life. Plan ahead for how to ‘escape’ and make an agreement with yourself to eliminate or minimise unhealthy behaviours and stick to your limits. For example, watching a movie or two episodes of your favourite Netflix show is very different from bingeing until 2am. Try one glass of wine on a Friday instead of two each night. Listen to a podcast on a walk instead of snacking;
    • Monitor and reduce screen use. Are you seeing more human faces on screens than in person, can you replace with real contact? Does your screen use feel compulsive? Do you wish you could turn something off but can’t seem to? Do you have blurred vision, neck pain, headaches, irritability and trouble sleeping? These are all signs of excessive screen time;
    • Don’t reply to everyone. It was true of email ten years ago and it’s true of all forms of digital communication today. We are not saying ignore people in need, but answer what you have to. You can’t always please everyone;
    • Aim for five minutes of complete silence each day. No screens, no music, no audio at all, no talking. Yes, it’s an old-fashioned idea but just try: it’s powerful. In that five minutes notice how your body feels.

Our guide to last minute Christmas shopping

Because Christmas is a time of family and giving, that means it’s a time of decisions.

We need to decide what to give, where to buy, what to choose when we can’t find what we have in mind, and of course, how much to pay.

If we’re organised, we’ve well and truly finished buying gifts, and they’re all wrapped and delivered or under the tree.

But a lot of us have not. According to some surveys, most of us are just not that organised, with half of us leaving at least some Christmas shopping to the last week and even Christmas Eve.

A fast company survey finds that 74% of consumers plan to do some last-minute shopping.

The fact that one study even showed that last-minute gift buyers outspend those who buy earlier says something important about gift-buying and financial stress.

That is, when we are prepared, we spend more carefully, and when we rush, we tend to throw money into gift-buying.

One of the leading pressures on many people’s already-strained financial position is the habit of over-spending on gifts, gifts that don’t necessarily prove our love for others.

Given that many of us will go shopping between now and Christmas, is there any way to avoid putting a significant dent in our finances and accruing debt we struggle to shake off later?

We have published several articles lately on the pressure consumers face at this time of year, including a three-part series: the real cost of gift giving.

We do not wish to discourage giving. Our point is to avoid the financial stress that comes with mindless and impulsive spending.

Financial stress is irrefutably linked to depression, anxiety, and sleep disorders, so it’s not a giant leap to see that the expensive gifts you buy – whether material or experiential ‐ could paradoxically lead you to feel less likely to connect with other people.

We believe it’s helpful to take a few minutes and double back to some key principles before you enter the mayhem of last-minute Christmas shopping.

Here are some guidelines to help you buy gifts people will love and help you avoid impulse spending that causes you unnecessary damage later.

Giving isn’t only about spending a lot of money.

Sounds completely obvious, right? Well, it isn’t, evidently, as the six weeks from mid-November to Boxing Day has consistently become the biggest-spending time of the year.

Overall, Australian households spent an average of A$6,000 each over the Christmas season in 2021, the six-week spending frenzy from mid-November to the end of December.

All retail spending, including food, alcohol, and gifts, amounted to a massive $55 billion spending binge, which made it a record Christmas for retailers.

It’s tempting to get swept up in the spending spree and see low-cost (or no-cost) giving as ‘uncool’ or anachronistic. But consider this: if someone did something incredibly old-fashioned for you, like, for example, bake cookies for you, how do you think you’d feel?

Only the hard-hearted would not feel pretty good about such a gift.

Here are some ways to give without spending more than $20:

    • Call someone for a long video chat, tell them you love them and ask how their; year has been, and how they are doing. Listen to them and don’t offer advice;
    • Write someone a (hand-written, not printed out) letter or card. If you want; to glam it up, put glitter or smarties in the envelope;
    • Give away a favourite book to someone who will appreciate it;
    • Offer help to someone using your best skills;
    • Cook someone their favourite dish; and
    • Bake and deliver homemade cookies, or sweet treats.
    • Can you afford your increase your debt?

No really. Can you afford to add to your debt?

Will you have trouble paying it off later?

Will your intended spending push you outside of your budget? Is it eating into your buffer or emergency fund?

This is incredibly important if you are already laden with debt and under severe pressure to meet your existing obligations.

Some people have a little fat savings-wise, and they’re happy to spend a bit more; some don’t. It’s wise to get into reality about money as quickly as possible – and stay there.

If you cannot spend much, that is probably an indisputable fact.

If you must tell someone, you are under financial pressure and can’t afford much of a gift, write them a card or letter telling them what they mean to you and fill it with glitter, or stick lollies in the envelope. Spend time thinking about what to write.

They will not forget the effort you went to, and your openness and vulnerability may even deepen your relationship.

What is your spending limit for the shopping you still must do?

If you don’t have a spending limit, you might want to pause before rushing to the shops. Maybe sit down – literally for 10 minutes – and come up with a reasonable and sensible spending limit.

It’s best to come up with a limit of some kind, especially if you have had past issues with compulsive spending.

Putting limits on spending stop us from making expensive mistakes.

What that limit is needed to be is up to you, but as a guide, you probably don’t need to buy multiple gifts for people.

Bear in mind, too: most loved ones will be happier with one thoughtful gift than three that seem random or maybe as though you were buying to your tastes and not theirs.

If you’re not sure about it, don’t buy it.

You know that little voice that says, ‘I’m not sure about this’ – listen to it.

Does it say, ‘I’m not sure if this is his/her kind of thing, but I like it’ or just ‘this is very expensive’? That’s a sign you are about to buy something on impulse. Take five minutes out before you buy it.

Will they like it? If you can’t answer yes immediately, put it back.

Sometimes the ‘perfect gift’ does appear before us, but it’s rare. Don’t try to force it.

There are more reliable Christmas gifts out there if you apply some simple logic.

    • What do they like? What is their taste?
    • Have they said they want something?
    • How do they spend their free time?
    • If you can’t quickly answer these, a voucher or gift card is more thoughtful than a guess.
    • Experiences are more memorable than things.

Experiential gifts are more memorable than most stocking fillers, which tend to become old within days of going into use. Or maybe they don’t even get opened at all.

Red Balloon is one of the best-known websites that allows you to book hundreds of experiences, from diving with sharks to a sleepover at the zoo.

You can even give experience gift vouchers if you aren’t quite sure what experience to choose. Red Balloon and Class Bento have these.

Here are some examples of ‘experiential’ gifts:

    • Book a group activity with family and friends – from an art class to a virtual reality game;
    • A camping trip (without all the luxuries!);
    • Book a mini adventure – from sailing to skydiving or even rock climbing;
    • Tickets to a live music concert;
    • Go dancing with friends;
    • Send someone a hand-written letter (no, really); and
    • Host a dinner party and base the menu on your loved ones’ favourite ingredients; and
    • Vouchers are not boring.

Boring to who anyway? To us, that’s who – because we want to look like we know how to buy the perfect gift. But the truth is those are not easy to buy.

Besides, people that know us well already know if we care. A gift doesn’t prove it.

We feel the pressure to dazzle someone with our insights and ability to delight and shock, but the truth is that it is like throwing a bullseye on a dartboard while blindfolded.

Vouchers are not dull. The reality is people love the excitement of planning how to spend free money, especially if it’s in their favourite store.

The trick with vouchers and gift cards is to buy them for the right store.

If your mother-in-law loves perfume, but you aren’t sure which one, you could buy her a voucher for a chemist or Myer. Don’t buy her a Bunnings gift card!

Don’t overspend on food that gets wasted.

How often is there food leftover that gets thrown away? Seriously, almost always, right?

The actual numbers are staggering. Nine out of ten households discard over 25 per cent of their food during the festive period.

As you shop, try to be mindful of what’s going on in your trolley. Ask yourself:

    • Do you need this item? Is it essential?
    • Is there anything in your trolley that wasn’t on your list? Why?
    • How much of what you are buying is ‘extra’ to try and please people?
    • Are you catering to confirmed guests or for people who might show up?

Here are ten last-minute gift ideas:

    • A handwritten letter or card with glitter or chocolate inside the envelope.
    • An annual subscription – to a magazine, a streaming service, or an audiobook service.
    • Home-made date vouchers.
    • Vouchers/gift cards.
    • An experience, such as a chance to go a rally-driving experience or a day spa.
    • Tickets to a fun park.
    • Tickets to a luxury or outdoor cinema.
    • A luxury journal and quality pen.
    • Cash!

The real cost of gift giving – part 3 of 3

In ancient history, giving gifts began as part of the ritual of worship and over the centuries, it has morphed into a show of appreciation. In the age of mass consumerism, gift-giving has become an expensive habit, especially during the holiday season.

While most of us worry about money to some degree, gift-giving has costs we usually bear without much complaint; giving is a respected value, feels good, and is accepted as a cultural obligation. Besides, we have special labels for people who don’t play along with gift-giving: who wants to be labelled Scrooge or the Grinch?

Let’s take a look at one specific festive custom: the excessive expectation everyone will have a present for everyone else who arrives on Christmas Eve or Christmas Day – whether they are young nieces and nephews, twentysomethings, cousins, partners of relatives. Even exes in attendance get a gift. It’s probably no exaggeration to say half the gifts exchanged in these situations are politely put in a cupboard when they arrive home – and forgotten. The obligation to provide a pile of gifts – of appropriate value – across extended families can add tension to what is often an already awkward family gathering. It almost certainly adds to seasonal financial stress.

Never mind that in the affluent West that many of us take months to repay debts incurred at Christmas time and in Black Friday and Boxing Day sales. So, at least reasons to buy expensive gifts are out of the way after Christmas, right?

Wrong. February and March tend to have the most weddings in Australia, which means wedding costs and wedding gifts for guests. February and March also have a lot of birthday spending, as those are the second and third most common months to have a baby. From there, the retail calendar kicks in: with gift-giving the norm at Easter, then for Mother’s Day – not to mention birthdays and anniversaries for the rest of the year.

Another type of gift-giving that is anecdotally growing is also worth noting: buying ourselves gifts and treats for our birthdays or just ‘getting through hard times such as COVID, often just because we see appealing items in big seasonal sales.

So, how can we avoid the financial stress that comes from adding new debt to existing debt and the symptoms and impacts of that financial stress?

Some of us, at some point, have completed a budget (even if we can’t always stick to it) and are humble enough to get financial advice to try and do better. We are not clueless.

But without an overhaul in our thinking, choosing gifts will remain stressful for many people. There can be a huge array of options and a nagging temptation to show our appreciation – for ourselves and others – by over‐spending.

If you have tried every trick to rein in spending on gifts, it could be time to try something new – using mindfulness with your finances, also known as financial mindfulness. Mindfulness is described as moment‐by‐moment awareness.

Take the example of a teenager who has the iPhone 13 but feels tempted to upgrade to the latest and greatest model with maximum memory. The iPhone 14 Pro Max with 1TB memory will set you back $2,769.

“We all have urges that we really, really want a new gadget like the latest iPhone, including me,” says Financial Mindfulness CEO and Founder Andrew Fleming.

“It feels good to take it out of the box and start using it. The feeling of having the latest technology makes you feel cool, and the children love it. Like anyone else, I’ve learned those feelings don’t last long, and they certainly don’t improve your life, despite what the ads tell us.

“Always having the latest iPhone won’t make me or anyone else truly happy. In fact, always giving in to buying the new iPhone – or the latest of any brand of the device – will actually decrease happiness because it will probably contribute to increased financial stress.”

The reason those sentiments feel uncomfortable is that they’re true. Researchers from Washington University and Seoul National University, Joseph Goodman and Sarah Lim, found that giving ‘experiences’ increases the happiness of recipients more than material gifts – even if people are not socially close.

Hence the boom for online companies selling “experiential” gifts: in Australia, RedBalloon; in the UK, Red Letter Days and in the United States, retailers like Cloud 9 Living and Great American Days.

But focusing on experiential as opposed to material gifts is unarguably only half of the answer. While the research shows a hot‐air balloon ride or chocolate‐making course should satisfy the recipient more than a boxed gift wrapped with a bow, if you try to please someone with the dollar value of your gift, your debt problems could get worse, and that undeniably a problem. Ever looked at the cost of sky‐diving, rodeo‐riding or maybe cage-diving with sharks? You will spend hundreds, if not over a thousand dollars, on these.

Financial stress is irrefutably linked to depression, anxiety and sleep disorders, so it’s not a big leap to see that the expensive gifts you buy – whether material or experiential ‐ could paradoxically lead you to feel less likely to connect with other people.

Most of us know overspending will put pressure on us, but when did knowing right from wrong stop human beings from making mistakes? A parent, relative or partner with poor self‐control around money will often buckle to badgering from a child or give into a yearning to people‐please and buy that new smartphone, tablet, holiday or even a car.

A daily mindfulness practice will lead to a more mindful approach to gift‐giving so we do not drift into autopilot when buying. It’s inevitable this will lead us to confront some fundamental uncomfortable truths about money. “Mindfulness helps to calm the mind, and with a calm mind, we make better decisions,” Fleming says.

“Sometimes it’s a better decision to treat ourselves to a book or a movie or a massage instead of the latest smartphone.”

It’s important to note mindfulness is no silver bullet – it can, however, from there, we can make some deep, meaningful changes: when we are forced to face old assumptions about money.

“There’s a big mindset change some of us need to make at times like Christmas, birthdays and weddings: how much we spend on people is not automatically a sign of our value and love for each other.”

This brings us back to gifts. You can create lasting memories with creativity and your knowledge of a person.

How about homemade cookies baked with personal messages – each describing why you love the recipient ‐ hidden in the dough? Or a hand‐made recipe book containing meal suggestions from the recipient’s family members? Maybe get a t‐shirt printed with the recipient’s favourite funny saying or if you have time, plan a surprise outing and put thought into favourite stops and a destination, or even fill a tall jar with inspirational quotes written and printed in different colours.

If you have lots of time, learn the guitar, then write someone a song and play it for them. If you don’t have much time, spend a couple of hours hand‐writing a letter telling the recipient what they mean to you. Could any gift feel better and teach about the real meaning of value?

Time is a key resource when it comes to gift-giving; you need to know someone or learn about them to know what might make them happy. And time is valuable. Benjamin Franklin was widely credited with the unforgettable line “time is money” in 1748 (although it’s been shown to have much earlier origins, perhaps even in ancient Greece). We can spend money and time, but we’re spending too much money might cause crippling financial stress; spending a lot of time only enhances relationships – especially with children – by creating last memories.

Andrew Fleming says getting our minds to a state where we can see that spending time is just as valuable as money when it comes to gifts isn’t easy.

“Everyone thinks they are time-poor. One tool I know that can really transform how much time I think I have is mindfulness. Using mindfulness when I’m spending money means I make better decisions – no doubt about it.”

The real cost of gift giving – part 2 of 3

Who wants to buy something special for their child, partner, relative, friend or colleague at this time of year?

Almost everyone does, giving gifts is a powerful signal of who we value in most cultures.

It’s a thoughtful idea too, given how tough 2022 has been. We’ve had record increases in the cost of living with inflation at 7.3 per cent, coupled with the Reserve Bank of Australia (RBA) cash rate moving from 0.5 per cent to 3.10 per cent.

This has driven the standard variable home loan rate to 7.44 per cent, compared with 4.55 per cent at the start of the year. More and more Australians are suffering mortgage stress, and this is set to continue well into 2023 with Economists predicting more rate raises by 75 basis points.

It is however important to note that if we are not aware of our underlying financial stress at this time of year, advertising pressure can trick us into an expensive false reality: that our usual safe spending limits don’t apply when buying gifts for loved ones.

It’s sad to think we actually believe that the price of gifts should be in proportion to what people mean to us – and yet our national gift-giving habits suggest we overlook the damaging realities of money stress at the checkout.

Megan McArdle, writing for Bloomberg, argued: “there is a higher logic to the gift economy … that mandates we keep giving and receiving objects of dubious value”.

Gift-giving, she wrote, was connected to “an innate human value called “reciprocal altruism” which makes the costs of gifts “a maintenance fee for your relationship”.

But real-life problems are created when altruism is all about money.

As well-intentioned as gift-giving is, the Christmas rush to buy gifts is sometimes only ‘generous’ financially and not necessarily generous emotionally.

How often is our gift something the recipient really needs and will use?

Think about the concept of ‘re-gifting’. It has arisen as a response to people rushing to buy unnecessary presents for people.

How often will that extra gift, or a last-minute gift, improve a loved one’s life?

Office and friendship group ‘Kris Kringles’ fall firmly into this category. Sure, they seem like harmless fun, but how often do people buy something of real value?

Is a ‘joke present’ really a bit of a waste?

Too often, we believe we are “too busy” to learn and understand our colleagues’ – and even our loved ones’ – real wants and needs.

When we go into this kind of autopilot thinking, we may be setting ourselves up for financial stress and its many impacts on our relationships and our work.

Financial stress can also make existing anxiety and depression worse.

Research by Joseph Goodman (from Washington State University) and Sarah Lim (from Seoul’s Centre for Happiness Studies) found people commonly buy material gifts over experiential gifts, despite the fact that recipients often feel happier receiving experiences.

Material gifts are those we can touch while experiential gifts are those that create a memory.

So, gift-giving becomes a stressful problem which we solve with money – by buying the latest expensive gadget, a heavily-marketed ‘luxury’ or some kind of timeless status symbol. Or some kind of disposable trinket that gets a laugh when it’s opened – and is never thought of again.

Here are some examples of ‘experiential’ gifts:

    • Book a group activity with family and friends – from an art class to a virtual reality game;
    • A camping trip (without all the luxuries!);
    • Book a mini adventure – from sailing to skydiving or even rock-climbing;
    • Tickets to a live music concert – any genre;
    • Go dancing with friends;
    • Send someone a hand-written letter (no, really); and
    • Host a dinner party and base the menu on your loved ones’ favourite ingredients.

If it sounds mean-spirited to question gift-giving, that’s not the intention here. Only narcissists and debt collectors (and the occasional teenager) believe it’s better to receive than to give.

Gift-giving can be important and it can help create feelings of wellbeing in important people around us. It can be a panacea for the very self-centered existence people in western nations live.

The problems raised here are not about gift-giving per se, it’s the headless chook race that gift-giving can resemble – and the financial stress and strain placed on many of us.

According to Australian Retailers Association, Australians are to spend $63.9 billion in the pre-Christmas sales period (November 14 – December 24), which is up 3 per cent on last year.

Add the costs of Valentine’s Day, Easter, Mother’s Day, Father’s Day, birthdays, weddings and anniversaries, and various other retail frenzies and you can see how gift-buying has become a major driver of the retail engine in Western economies.

Of course, it’s a double-edged sword: retail spending is celebrated each year as a measurement of the strength of the economy. To some degree, it’s an accurate reflection.

But at a personal level, buying gifts for everyone beyond our means will cause personal financial stress and all the issues that come with that.

Debt consistently shows up in surveys as a leading cause of financial stress.

It’s now also widely known personal money problems consistently show up in research as a major cause – if not the major cause – of stress in general.

The links between financial stress and poor mental health are well known, but recently the physical symptoms are being acknowledged and links to serious physical illness are emerging.

In the United States, the company Four Seasons Financial Education surveyed 511 employees in a national study and found disturbing correlations between financial stress and health problems.

The respondents rated their level of financial stress, then the prevalence of health issues between the two groups was compared.

People with high financial stress had a higher reported incidence of health issues across all nine illnesses identified – heart attack, high blood pressure, depression, anxiety, infertility, gastrointestinal issues and sleeplessness, migraines/headaches, and memory loss.

“The greatest disparities were found with anxiety and depression between these two groups,” the study findings said. In the groups with lower financial stress, 19 per cent reported depression and anxiety, but amongst the more financially stressed respondents, 55 per cent were depressed and 68 per cent had anxiety.

When the survey responses were further broken down, into the very highest and lowest levels of financial stress, people under extreme financial stress were five times more likely to have memory loss issues, more than three times as likely to report depression, and nearly twice as likely to have anxiety.

They were also twice as likely to have gastrointestinal problems.

Debt is a major cause of financial stress and the search for an answer has become a popular google search term in its own right, with variations of ‘how do I relieve my financial stress?’ common.

If you’ve tried all the usual advice and methods, it might be time to investigate a new approach, or at least, new tools to supplement what you are already doing.

In the final part of our series on the real cost of gift-giving, we look at how mindfulness can help reign in over-spending and the financial stress that often comes from increasing your debt burden at this time of year.

The real cost of gift giving – part 1 of 3

The tinsel and decorations might still be in a box under the stairs, but now is the time to think ahead so that you don’t join millions of Australians saddled with repaying holiday debt well into 2023.

One of the leading pressures on many people’s already-strained financial position is the habit of over-spending on gifts that don’t necessarily prove our love for others.

In this three-part series, we will explore the size of our national gift-buying obsession, look at the health impacts of the financial stress that follows, and then explore how a targeted mindfulness practice can help change the auto-pilot approach to gift-giving while potentially bringing us even closer to loved ones.

There is also a real likelihood that gift-giving becomes retail therapy in these uncertain times – a set of behaviours we use to try and feel a bit better. But as Financial Mindfulness has found, overspending has the opposite effect on our stress levels.

According to Finder, Australians are set to fork out $27.3 billion on everything from presents to champagne cocktails this festive season. That’s equivalent to a 14% increase compared to last year’s estimated $23.9 billion spent.

The average Aussie is expected to spend $1,361 this Christmas on presents, food, alcohol, eating out and travel.

Forecasters are still saying that we can expect a strong Christmas selling period despite all the uncertainty, strong growth in interest rates and household pressure on disposable income due to about 8% inflation across that wider spectrum.

What all this means is more credit at a time when people can least avoid it.

Those debt repayments will be on top of juggling usual repayments and bills, such as home loans, student loans and/or car instalments, insurance and rent.

With house prices falling and the ratio of household disposable income to household debt increasing, 2023 looks like a year of increased financial stress.

But while we are dealing with debt repayments, the perceived pressure to buy gifts and to get a little retail therapy never lets up for long.

Retailers are so creative now they tend to attach a major sale to almost all significant dates in the calendar, including milestones that have not traditionally been associated with gift-giving and spending.

So Boxing Day and New Year’s Day become days to buy and even treat others. Australia Day sales will advertise Aussie memorability in the form of clothing, flags, food, and trinkets.

Back-to-school sales in mid-January are no longer just about what our kids need; increasingly, they market to parents what children want.

In theory, that sounds reasonable, but in practice, it can mean excessive spending on gifts such as technology, bags, and clothing as children try to maintain or create an image to garner popularity with their peers.

Without clear boundaries, pressure to indulge in this kind of gift-giving to materially bolster children’s self-esteem can occur whenever kids are set to return to school after holidays – so several times a year.

On February 14, Valentine’s Day is, of course, a major date on the retail calendar.

On average, Aussies spent around $180 each for their significant others, while the nation splurged over $1 billion on Valentine’s Day gifts.

A new arrival on the retail calendar is ‘Cash Mob Day’ which falls on March 24 2023.

Cash Mobs are based on the viral trend of ‘Flash Mobs’, but instead encourage people to spend up to support local businesses. It’s a worthy idea, but again, a retail trend that creates a reason to buy something you actually don’t need.

Easter is next, in April. Luckily the major supermarkets stock around 50 lines of chocolate each, not counting millions of Easter buns.

In recent years retailers have been encouraging consumers to buy more than chocolate or buns, though.

In 2022 marketing heavily pushed the idea of Easter baskets for adults and children. Adult basket ideas included jewellery and kitchen accessories, while kids’ baskets could include collectibles, toys, egg-decorating kits, and activity books.

Aussies spent $1.5 billion on chocolate and food.

On May 14 comes Mother’s Day, when consumer spending spikes to around $2 billion, according to the Australian Retail Association.

From mid-year, there’s often a string of birthdays to buy for: the most popular months for birthdays in Australia include May, July, August, September, and October, according to the Australian Institute of Health and Welfare.

Anyone who has hosted a children’s birthday party knows how expensive and high pressure they can be, with parents forking out anywhere between $300 and $3000.

Then there’s the angst over how to please teenagers and other loved ones, a worry which is almost always settled by spending at or above our absolute limit.

Winter sales ramp up in May and June, too, with major advertising campaigns.

In recent years end-of-financial year sales, which were only significant for businesses, have been repackaged as major consumer events, usually with the prominent capitalised acronym EOFYS, on promoted on large banners.

Then comes Father’s Day on September 3 (on which about $900 million is spent), followed by weddings and wedding anniversaries galore as the weather warms up.

Spring and autumn are the most popular seasons, with April, September, October, and November the most popular months to get married.

At the end of November, the frenzy of Black Friday and Cyber Monday and then we lead in another Christmas.

While it seems like the right thing to show our love by buying new toys, trinkets treats, and gadgets for children, family, and friends the cost is in black and white in our online statements.

We spend thousands upon thousands of dollars each year to try and please loved ones, when if the tables were turned, most of us would be happy receiving thoughtful, inexpensive gifts – or even just spending time with friends and loved ones if we knew they were battling financially.

According to data from the Financial Mindfulness – Financial Stress Index (FSI) Report – the vast majority (89%) of us are worried about money.

Digging deeper, we are completely overwhelmed (79%), downhearted (82%), and distracted (77%) by our financial situation.

Financial Mindfulness estimates the resulting lost productivity costs Australian businesses $32.14 billion per annum.

To find out more on how you can measure financial stress in your organisation, contact Andrew Fleming, [email protected]

How to avoid impulse spending during Black Friday and Cyber Monday sales

Black Friday and Cyber Monday sales are upon us, with a marketing onslaught that can be hard to resist.

The ideal mindset, when faced with the temptation to spend, is to be financially mindful – fully aware of your financial position and real needs.

The word ‘frenzy’ is not the optimal environment to maintain financial mindfulness and avoid financial stress. But a shopping frenzy is exactly what is expected, beginning next week.

‘Australian retailers can look forward to a sales frenzy over the Black Friday and Cyber Monday shopping period, with a record $6.2 billion predicted to be spent in stores and online according to research from the Australian Retailers Association’, research firm Roy Morgan reported.

The four-day shopping period from November 25 (when Black Friday sales begin) to November 28 (Cyber Monday) began in the United States and has gone from strength to strength in Australia.

The 4 days shopping period has extended even further, making the actual period 11 days!  As I write this article, my email inbox has already been inundated with Black Friday specials. Email titles such as;

“VIP Black Friday starts now – GO!”


“Black Friday has arrived EARLY FOR YOU

In the US, Black Friday is always the day after Thanksgiving. While it’s not an official holiday, many people have the day off (except those who work in retail).

This year, Future Publishing predicts that Black Friday will raise USD$158 billion in total sales.

The marketing for ‘hot deals’, designed to draw in shoppers, has already began, with Amazon among companies already seeking to entice spending.

Consumer spending is good for the economy, but with a frenzy about to hit, ‘strength’ is being replaced by ‘mania’.

Frenzied behaviour when shopping, especially when the payment methods are the deferred – such as buy now, pay later accounts or the ever-popular credit card – can mean sustained impulse spending.

Impulse spending is a recipe for financial stress, especially when bills begin to fall due.

Let’s drill down to the specifics of why we should pull ourselves – and our households – back to a mindset of mindful spending next week – and keep that mindset right through Christmas and beyond January sales.

The first thing to get real about is whether you already have disorganised finances. If you – or your household – does, then a period of sustained impulse spending is likely to cause problems.

What is impulse spending?

Impulse spending is when you purchase something that you weren’t planning to.

It is your unplanned spending, or when you purchase something without considering the consequences of the purchase and are acting on ‘impulse’, i.e. a sudden strong and unreflective urge or desire to act.

At this time of year, that could range from extra Christmas decorations to hotel deals to the latest smartphone or putting a deposit on a brand-new car.

Everyone behaves impulsively at times, and it’s not always bad. It can be fun and harmless, so long as it’s measured and your finances are in order.

But we need to be clear. Regular impulse and unplanned spending can ruin your budget, create a debt spiral and impact on your ability to achieve your financial goals.

If your goal is getting out of debt, then impulsive spending is damaging.

The same goes for goals like paying off your mortgage, saving for a holiday or investing for your future.

Buying on impulse and overspending will use up money you could otherwise put toward your goals.

Let’s look at spending via social media, which has been growing in recent years.

According to a study by Finder, the average Australian spends $860 per annum on purchases made through social media, that’s $71.66 per month.

Investing $71.66 for 10 years at 8 per cent pa would grow nearly $13,000 over 10 years.

That type of equation is known as ‘opportunity cost’ – the cost of one item is the lost opportunity to do or consume something else.

Impulse spending is one of the main underlying money habits that create financial stress – which we know from research creates feelings of shame, guilt, confusion, anxiety, fear – and relationship issues.

If we cannot deal with these feelings and an emerging issue in our finances, some people turn to dysfunctional strategies like using short-term loans or even gambling to try and solve their problems. Or they may begin to drink more alcohol or return to smoking cigarettes to cope.

What drives impulse spending

Your emotions play a huge part in what you buy and how you buy.

Impulse spending occurs when we make spending decisions based on pure emotion.

Knowing your personal motivations and main triggers to impulse spending will help you to manage your money and impulse spending habits better.

Your personal finances are just that: personal, so it makes sense that when something’s going on in your personal life, it is likely to show up in your spending habits too.

Triggers that can lead to impulsive shopping include:

    • Excitement, including ‘bargain’ revelations;
    • Avoiding reality;
    • Stressed, overwhelmed;
    • Bored, distracted;
    • Celebration;
    • Comparing self (as inadequate) to others, jealousy;
    • Frustration;
    • Guilt, feelings of failure;
    • Loneliness; and
    • Rebellion.

Research suggests that more extroverted personality types, status or image-conscious people, and those who prefer to live in the moment and make quick decisions are more likely to be impulse shoppers.

Regular social media users and those who treat shopping as a hobby are more likely to have impulse shopping tendencies.

There is also evidence that people who are cautious, have self-confidence, feelings of fulfilment and a sense of being ‘in control’ of one’s life are less likely to spend impulsively.

Red flags pointing to impulse spending tendencies include:

    • Regularly buying without planning to;
    • A chronic inability to save money;
    • Trouble with regular financial responsibilities;
    • Tendency to use money to change feelings;
    • Guilt and regret over shopping decisions;
    • Owning items that barely get used; and
    • Regularly return items due to a change of heart.

How to manage impulse spending

The key mindsets to develop – and hold on to – are based on awareness and planning.

To begin with, we need to be in reality. So, you do need to get real.

A great place to start is to review your last three month’s spending, comparing how much of it was planned and how much was impulse spending.

It’s essential to acknowledge which habits are helpful and which are not.

Creating a budget and knowing what you spend should be your first priority.

Knowing where your money is going will help you to determine where you need to cut back.

Budgeting is not a ‘set and forget’ task. A budget needs to be reviewed and revised. Maintaining your budget is an essential skill to learn.

You need to directly deal with temptation too. We’d suggest unsubscribing from store email lists that tend to flood you with ‘on sale now’ messages and try to make you feel like you’ll miss out on something important.

If an item on sale was something you truly needed, you would already be aware of it.

Clearing your computer cookies is a good move too. Otherwise, they will any online retailers you have browsed will constantly remind you.

It’s also important not to attempt to deny yourself any spending totally. It won’t work.

Build some splurge/ fun money into your budget that allows for occasional spontaneous spending.

Providing a limit for this type of spending allows you to give in to an impulse buy every now and then without feeling guilty or worrying about overspending.

The amount of money you set aside should be determined only after you’ve taken all the essentials like rent, groceries and bills into account and will depend on what your budget can reasonably afford.

But it’s essential to track all spending to ensure you can see patterns in your spending that might need to be reined in or reversed.

Weekly check-ins to stay accountable will help support this.

How to deal with the ‘need’ to shop

Whenever you feel the urge to buy something new, or spend money, replace the urge with something that brings you joy.

Making a list of healthy activities and rewards that you enjoy or feel satisfying.

Things like seeing a loved one, cooking your favourite meal, walking by the ocean or in the bush, gardening, or phoning a great friend you haven’t seen for ages are almost certainly more rewarding than impulsively spending.

If your impulse spending is driven by comparing what you have (or don’t have) to others, take a step back and be thankful.

Learn to be grateful for what you do have and see from this more abundant perspective.

There is plenty of practical suggestions out there on gratitude – but in essence, it’s about feeling thankful for simple things in your life, which in turn creates feelings of wellbeing and contentment.

Try to adjust your behaviour with money towards medium-term and long-term thinking.

Rather than just saying: “I can’t buy that because I’m saving money.”  Think in terms of the opportunity cost, i.e. “If I spend $100 on this, I can’t put that money towards the trip next year”.

This reframing makes it a choice rather than a feeling of missing out.

Create reminders for yourself to act as reinforcement of your goals and encouragement towards saving. For example, if you’re saving for a holiday, save images of your dream destination in places you’ll see them: your screensaver on the phone, or computer, and rename your password for internet banking to your savings goal.

Some other strategies to reduce impulsive spending

Try avoiding the use of credit – it’s not easy, but it’s a great aim.

Credit cards aren’t inherently bad, but if you’re prone to impulse shopping, they may worsen your situation.

Getting rid of your credit card is equivalent to getting rid of the thing that enables you.

Learn to spend within your means and only use money you have, i.e. use your debit card or cash for purchases instead.

Buy now, pay later is essentially another form of credit. BNPL platforms allow you to enjoy your purchase straight away but defer the payments down the track.

There’s a reason some experts dub them ‘buy now, pain later’.

One way to begin radically changing our money behaviour is to experiment with a ‘no spend challenge’.

A no-spend challenge is a personal spending challenge where you cannot spend any money on non-essential items.

They can be a good strategy to implement to break spending habits. You can choose a category such as eating out, clothes or going out, or you can make it for all non-essential spending. You set the time frame and challenge.

Accountability is always a useful tool when changing behaviour – especially reducing potentially harmful behaviours.

The people you live with or spend the most time with can be a support for you. Be open and share with them that you’re trying to spend less and ask them to support you if they see you making an unnecessary purchase.

See of you can think of someone non-judgemental in your life that you trust who might be an ‘accountability buddy’ for you around your spending.

Do you have a sibling or friend who’s willing to get in your face and tell you not to buy something? Bring them on your shopping trip. Tell them what you plan to buy and ask them to talk some sense into you if you start straying from the strategy.

Practice financial mindfulness

When you are feeling a strong pull to spend money, try to take a mindful pause by asking yourself these questions:

    1. Why am I here? (In this store/ or at my computer, online shopping)
    2. How do I feel?
    3. Do I need this?
    4. What if I wait?
    5. Can I afford it?
    6. Where will I put it?
    7. Do I really need it, or is it a want?

If you find your impulsive shopping behaviour returns or is uncontrollable despite your best intentions and attempted actions, you may be dealing with a genuine shopping addiction.

Sometimes this is known as ‘oniomania’. Yes, there’s a word for it – that means it’s real.

That might take some more help, but it’s not impossible to get under control. A good place to start is a therapist trained in treating addictive behaviours.

Measuring financial stress

In the second part of our financial stress webinar series, Dr Nicola Gates provides a detailed look at measuring financial stress.

We have covered what is financial stress and why it’s important to understand in part one.

It is important to know what financial stress looks like in general and how it manifests for an individual in terms of symptoms.

Measuring financial stress adequately is an essential part of addressing the corrosive impact of the problem on groups and individuals.

We are interested in this as Financial Mindfulness is an app that measures and reduces financial stress.

It is interesting and may be useful to others to hear something about our journey on this fascinating point.

Previous efforts to measure financial stress

Many excellent efforts to measure financial stress have tended to just look at the financial status aspect.

It is important to know if people have a financial cushion, any savings, whether they can meet daily expenses and those sorts of issues.

It is also important to know if someone can meet the significant financial challenges coming in the future – like retirement. So do people have enough superannuation?

Probing on these topics is often framed as ‘financial wellness’, but it is really about financial status.

‘It’s not looking at wellness because they’re not asking how people feel about worry, concern, or anxiety,’ says Dr Gates.

‘They’re not asking questions about how someone’s financial status impacts their behaviour and how they think and what they do.’

Dr Gates says to address financial stress; we need a “much more comprehensive view of it”.

Developing a comprehensive index to measure financial stress

“From looking at all the research, we developed a Financial Stress Index (FSI) that picks up on five factors that we’ve identified from the literature, and they meet our definition of what financial stress is in terms of a biopsychosocial behavioural model, including financial status” said Dr Gates.

    • Financial status
    • Psychological impact
    • Behavioural signs of stress
    • Physical and physiological burden
    • Social engagement

“Behavioural signs of stress are vital because we need to identify people who engage in really unhelpful behaviour, like gambling,” Dr Gates said.

The physical and psychological burden is vital because to measure the impacts of financial stress, a person’s mental and physical health needs to be considered.

“We also need to look at social engagement because we know there’s a relationship impact,” Dr Gates said.

Overall, there was a concerted effort to design a process that matched well onto significant aspects of the World Health Organisation’s definitions of health and wellbeing.

“In terms of our measure, mapping onto the WHO definition, you can see we’ve got financial security, we’ve got psychological health, we’ve got physical health, we’ve got behavioural signs – which are some of the valuable things, and we’ve also got social engagement.”

The Financial Mindfulness app and the FSI

Financial Mindfulness asks respondents seven questions for each of those dimensions to measure someone’s level of financial stress, so 35 questions in total.

The five specific dimensions are measured by completing a 35 statement questionnaire using the Financial Mindfulness app.

Each employee rates on a frequency scale for how often the statement is true to their specific situation for the past month.

The takeaway message is that in measuring financial stress, people seeking to reduce the problem to think as broadly as possible to capture the enormously widespread impacts of financial stress.

‘In measuring financial stress, we need to keep track of financial health but also mental and physical health.’

The FSI was developed by a team of neuropsychologists and financial experts to work out a person’s financial stress levels and potential symptoms.

The app works by combining awareness of one’s financial stress levels with Mindfulness, financial literacy and goal-setting tools to reduce financial stress.

Aggregated FSI data

The aggregated data from hundreds of questionnaires allows Financial Mindfulness to produce the FSI Quantitative Assessment Report, a leading indicator of where, how, and why financial stress impacts employee’s productivity.

Lost productivity is quantified in dollars and days, providing insights so employers can better support employees.

The report contains all employee FSI results aggregated and analysed across the five specific dimensions on a de-identified basis.

This information has never previously been unavailable to employers before Financial Mindfulness developed it.

Measuring employee financial stress at a granular level informs employers about the nature and extent of support required for employees.

Reports are provided twice a year and track changes over time.

The FSI and the Quantitative Assessment Reports have been developed through rigorous and in-depth research carried out by Financial Mindfulness, drawing upon the expertise of in-house neuropsychologists and finance experts.

A detailed look at Financial Stress

In the first part of our financial stress webinar series, Dr Nicola Gates provides a detailed look at financial stress.

Where psychology and finance meet

The name Financial Mindfulness indicates personal finances and attempts to secure peace of mind.

Descriptions, discussion and of course treatment of stress are the realms of psychology and not for financial experts to delve into.

So how and where is there any link between neuro-psychology and finance?

“Principally because financial stress is a leading cause of stress and distress,” said Dr Nicola Gates, a clinical neuropsychologist associated with Financial Mindfulness.

Relationships Australia also recognises that financial stress is a lead cause of relationship breakdown. Financial stress is a profound issue for health and mental health practitioners.

Dr Gates points out that the meeting of the two fields, which were for a long time thought to be unrelated, happens when there is a focus on prevention.

In this case, prevention of financial stress.

The role of finances in good health

A very short answer is that financial stress involves our thoughts about money and finances and what we do in terms of spending and saving, and how we manage our finances.

But it’s worth a more detailed examination of what underpins financial stress.

Fundamentally it is related to health and has an impact on our health.

Most of us think that being healthy is the absence of illness.

“I’ve talked to thousands, probably tens of thousands of people in my capacity as a health educator, and most people consider that they are healthy or enjoying wellbeing when they are not sick,” Dr Gates said.

But in fact, good health, as defined by the World Health Organisation since the 1950s, includes much more.

The WHO’s constitution states: “Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.”

In the same document, it states that humans have a right to enjoy the highest attainable standard of health… without distinction of race, religion, political belief, economic or social condition.’

Integral are physical and mental health, and also as is occupation and ‘role functioning’.

This includes social and family relationships, and our environment, in the context of having meaning and purpose.

Impacts of financial insecurity

Financial security is also a key part of health and wellbeing.

Most people, on reflection, understand that financial security actually can underpin all the other factors that make up good health.

“If you haven’t got financial security, you actually can’t meet your health requirements,” Dr Gates says.

She points to the example of receiving a cancer diagnosis. According to the Dolomites Institute having cancer can lead to between $20,000-$50,000 in out-of-pocket expenses.

Poor role functioning can also affect financial security and vice versa.

“If you don’t have financial security, perhaps you can’t travel across the city to get a job or set yourself up in a business or something,” she says.

“Our research also shows that poor financial security and financial stress lead to a lot of aggression in people’s interpersonal relationships, and we know it has a significant impact on relationships.”

Also, without financial security, a person cannot influence and beneficially control their environment and their meaning and purpose.

“Financial security enables people, affords them often the time,” Dr Gates says.

“If you’re working three jobs or four jobs, you don’t have the time to pursue things that give you meaning and purpose.”

Lack of financial security also impacts relationships makes people feel isolated; they can’t meet psychological needs, including basic esteem.

Where someone is below the poverty line, this kind of extreme financial distress has major physiological impacts – sleep is affected, the immune system is threatened and sickness increases and even personal safety is reduced.

So financial security impacts people through every level of basic needs that are described in the famous pyramid of Maslow’s Hierarchy of Needs.

“You can imagine how financially secure will impact every level through the pyramid, from the basics,” Dr Gates says.

“But it also enables people to meet psychological their needs and a sense of belonging and connection.”

She says financial security is a fundamental aspect of health and wellbeing, and some people say it’s a fundamental right.

“This is the driver of my interest in addressing financial stress,” Dr Gates says.

What makes up financial stress

Financial stress has been defined before, and work done in Canada has been impressive, but the definitions have evolved.

“We described it as subjective, complex and multi-dimensional,” Dr Gates says.

It is personal because research shows that people can have high, secure financial status in terms of having financial assets and property and still, experience financial stress.

For example, they may have exposed themselves to high risks, where they haven’t got a return that causes them to stress for their future financial security. They may be asset rich but not be able to meet their daily needs. People that you would assume don’t experience financial stress do actually experience it.

It’s complex too because personal finance is incredibly complex. People can have Visa cards, multiple investment options, Afterpay, mortgage repayments, current accounts, savings accounts – and many other products besides.

It’s also true that financial literacy and skills – and even the law – have not kept up with the financially complex environment we find ourselves in.

“That is a significant cause of stress,” Dr Gates says.

How is financial stress multi-dimensional?

Because we have an individual, bio, psychosocial response to current and future financial concerns.

Financial stress triggers a physiological or bio-physiological response in our bodies and it triggers a psychological, emotional response in our brain, Dr Gates says.

Few would disagree financial stress also impacts our social relationships and it has implications for our behaviour.

It also pertains to the current and the future. You can be meeting all your basic requirements and maybe even saving, but not making enough for a housing deposit or to build superannuation.

“Financial stress is the opposite of financial security,” Dr Gates says.

The bio-psychosocial response in being financially stressed

Financial stress involves a bio-psychosocial response, which means the brain, cognition and behaviour are engaged, or ‘BCB’.

Financial stress triggers the sympathetic nervous system.

“When it triggers the sympathetic nervous system response, our body changes, which creates a burden on our body. And it also impacts the brain, cognition, neurotransmitters and so forth,” Dr Gates says.

Think about when you get a bill in the mail – plenty of people avoid opening it.

“That’s because their financial stress response has already been triggered,” Dr Gates says.

They might think ‘I know I can’t pay this’ and even have thoughts that increase that stress by thinking: ‘I can’t pay it, what am I going to do?’

A cycle of negativity increases the body’s stress response.

Or you can have a thought that goes, ‘okay, I can look at the bill, I’m going to phone the bank, I’m going to change my interest repayments’.

Thoughts can escalate the financial stress response – or de-escalate it.

Our behaviour can be unhelpful or helpful, which means sensibly – we can make favourable decisions. Or when we are financially stressed anxiety and stress can lead to unhelpful decisions and behaviour – such as managing it by spending.

A helpful behaviour would be changing our spending, putting our hand up and saying, ‘Hey, I need some help with this’.

The brain, cognition and behaviour relationship – the BCB – can be used to interrupt the negative financial stress response.

Recognising financial stress and its causes

Financial stress is the cause of stress – the stress response in the body is the same as all stresses.

The brain responds, the body response is precisely the same, Dr Gates says.

It might manifest in emotional, psychological symptoms like feelings of anxiety, worry, or concern. It may manifest itself in cognitive impacts – distractibility, poor attention, memory lapses, poor concentration.

Financial stress impacts the workforce and people’s ability to function in their daily life.

“We also know it affects people’s behaviour,” Dr Gates says.

People might gamble, drink more, eat more, spend more shopping and behave in their interpersonal relationships in a way that is unhelpful.

There can also be an escalation of verbal and control behaviour and physical violence in the home.

Financial stress is a significant problem.

“We know that it impacts over two million Australians at any one point in time, and it creates a substantial burden on people from a body, brain, mind perspective. And also, their families and their capacity to function,” Dr Gates says.

What are the causes of financial stress?

There are many and they change over a lifespan. In our 20s it might be paying for university, the prospect of a HECS debt. Saving money for a car, holidays while renting.

Then it might be mortgage repayment, starting a family and professional expenses.

Then things like insurance, superannuation and more money for the children. Research in Australia shows that raising a child costs about a quarter of a million dollars.

You may have to up-size your home, then medical expenses might start to come in.

“The concept of financial security changes across the lifespan,” Dr Gates says.

On a continuum, there is a temporal component with financial stress versus financial security.

“We can be struggling with issues, we can be surviving and managing, or we can be thriving.

When we’re struggling financially, and under financial stress, we know the impact – it reduces our immunity, increases sick leave, and increases sickness.

Our capacity for health-enhancing behaviours, like exercise, diet, and downtime, is affected.

The benefits of reducing financial stress

Dr Gates says people who are struggling with financial stress and people who are in survival mode too, can be helped by an improvement in their financial stress levels – towards a self-acknowledged ‘thriving’ state.

“We know that when people are thriving financially and in terms of health, we know that they enjoy higher immunity; they’re better able to make helpful, good decisions,” she says.

Sleep improves, and proactive health behaviours follow – such as having a fitness program and a good diet.

Financial security  – with the skills and experience and ability to manage personal finances – enables people and allows them to ‘positive cycle’ out of surviving and towards thriving.



Money and infidelity main reasons couples divorce

We know that divorce – the unsettling reality for one in three marriages – usually has an immense but largely immeasurable emotional impact on couples and their children.

The Austin Institute for The Study of Family and Culture collated data in 2021 from 4,000 divorced US adults, and they identified money issues as the number one reason couples divorced closely followed by infidelity, extra-marital affairs.

According to the statistics, a “final straw” reason for divorce is a lack of compatibility in the financial arena and causes almost 41 per cent of divorce

Extra-marital affairs are responsible for the 20-40 per cent breakdown of most marriages and end in divorce.

When one person goes outside of the relationship to get their needs met, whether it is physical or sexual, this can doom a relationship.  It is very difficult to get trust back once a partner feels betrayed according to

Closer to home, divorce means financial stress increases for divorced families in almost every area.

But the financial costs can be quantified. A detailed report by the National Centre for Social and Economic Modelling for AMP (called Divorce: For Richer, For Poorer) shows a $14 billion cost to “the nation [in] government assistance payments and court costs”.

“Divorce has a significant impact on families’ financial wellbeing, whether they have children or not, both in the short and medium term,” the report found. “While most families start to recover economically five years post-divorce, there remains a significant gap [20 per cent] in the financial well-being of divorced and married couples even five years later.”

The report found the median age of divorce for men was 45.3 years and women 42.7 years. It claimed divorce typically occurs during “couples’ prime wealth accumulation and child-rearing years”.

The division of assets caused the greatest financial damage, the report concluded, with retirement looking “bleak” for divorced couples because “super balances for divorced women are 70 per cent less than married women, and 28 per cent lower for divorced men compared with married men.”

“A divorced parent aged less than 45 years has 35 per cent fewer assets than a married respondent of the same age, while a divorced parent aged 45–64 years has assets valued at only 25 per cent of those of a married parent from a similar socio-economic background.”

In the short to medium term, there were big differences in day to day expenses that could conceivably set up problems for years.

Household expenditure changed significantly before and after divorce, with the biggest differences experienced 1 to 4 years out from divorce. For divorced men and women with dependent children, spending on items such as groceries, utilities, meals eaten out and alcohol and cigarettes increased, while money spent on clothing and footwear, repairs, maintenance and insurance dropped. The changes remained five years and more after divorce, although the disparities had eased.

The proportion of a divorced mother’s total income spent on groceries climbed 27 per cent between 1 and 4 years after a divorce, while the share of their incomes spent on utilities rose nearly 47 per cent. Their spending on health and medicines fell, while five years after divorce they were spending 45 per cent more on alcohol and tobacco.

Divorced fathers with dependent children increased their spending on education by 39 per cent inside the first 4 years of divorce. “This may reflect fathers having been the main income earner in the family and that paying for their children’s education is their main source of child support,” the report found. But divorced dads’ spending on also alcohol and tobacco by 53 per cent inside the first four years. Their grocery spending rose by nine per cent.

The report found: “Divorced mothers are more likely to experience financial stress than divorced fathers or couple families … One in five newly divorced mothers report they can’t afford to spend on the kids such as school clothing, leisure activities, or school trips for their children. This compares with only one in 50 newly divorced fathers.”

This may be related to the one area fathers benefited from after divorce: income. “The income of a divorced father is 26 per cent higher than the income of a … married father. This may reflect increased job mobility in terms of location and type of work as well as an increased ability to accept higher paying work.”

The employment rate is also higher for divorced fathers than for married dads five years after the divorce.

The report also claimed education outcomes for children from divorced families are slightly worse than for those families whose parents remained married. “Family breakdown increases a child’s chance of being an early school leaver (i.e. doesn’t complete year 12) by 6 per cent [and] decreases their likelihood of getting a tertiary education also by 6 per cent compared with children whose parents were married when they were 14 years of age.”