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Financial stress devastating Australians

Financial stress devastating Australians

Financial stress devastating Australians, close to 1 in 3 Australians suffer from significant financial stress, which has for the first time been comprehensively examined in new research by CoreData.

The results show financial stress leads to anti-social behaviour, relationship conflict and breakdown, isolation, sleep loss and symptoms of depression.

Most of us are aware of financial stress; the phrase appears daily in media coverage of money issues. But how money worries diminish Australians’ quality of life hasn’t been fully understood – until now.

But how money worries diminish Australians’ quality of life hasn’t been fully understood – until now.

Australian start-up Financial Mindfulness commissioned global research firm CoreData in July 2017 to question 1000 Australians about what financial stress does to their relationships and their physical and physical and mental health.

CoreData dug deeper into the issue than anyone ever has in Australia, creating the first ever personal Financial Stress Index, based on responses to 17 questions.

The results show nearly one in three people (30.4%) are suffering from significant financial stress and they are struggling compared to those who are not financially-stressed. Women were more likely to be more financially-stressed than men (33.4% v 27.6%).

Dr Nicola Gates, chief scientific advisor for Financial Mindfulness, said significant financial stress was “a lot more common than I had believed”.
“Worse 80% of them report severe discomfort – psychological and physical discomfort as a result,” Dr Gates said. “Financial stress is an issue that needs to be talked about in order to reduce stigma and shame, and to bring about intervention.”

35 cent of respondents suffering financial stress admitted using drugs or alcohol to manage negative feelings associated with personal finances during the past month. That level of abuse was a remarkable 18 times higher than people not under financial stress.

More than 66 per cent of those suffering financial stress said money worries directly led to feelings of fear, anxiety and/or depression – three times higher than people unaffected by financial stress. “Financial stress, like other stress, is a significant threat to our mental health and can lead to mental illness,” Dr Gates said. “For example, financial stress can cause a person to feel shame and develop a sense of failure which may lead them to become depressed.”

One of the most surprising findings was that financial stress is felt broadly, and not only experienced in low-income households. Respondents on salaries of up to $150,000 a year with investments of up to $750,000 were only marginally less financially-stressed than those who earned up to $90,000 with investments of up to $350,000.The findings also showed that financially-stressed Australians reported:

  • Their physical health was affected nearly six times as much as those not financially stressed (60.8% v 10.5%).
  • Arguing about money with family/partner nearly four times as much (75.8% v 21.4%).
  • Feeling at least considerably irritable / having angry outbursts over their money twenty times more (52.2% v 2.6%).
  • Having problems sleeping at eight times the rate of those not financially stressed (71.3% v 8.7%).
  • More than a third (35.2%) used alcohol or drugs to deal with financial stress.
  • 52.4% have trouble concentrating (vs. 3.3%), 16 times higher.
  • 37.8% have been hurtful towards themselves or others, 17 times higher.
  • Nearly nine out of 10 (88.0%) avoid social functions reasonably often, four times higher.
  • Worrying about money “most of the time”, at six times the rate of those not stressed (71.0% v 11.7%)

The results of this press release appeared in the Sydney Morning Herald and the Financial Standard.

Financial stress devastating Australians
Marion Russell from North Narrabeen, Sydney
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Financial stress is widespread for Australians

The Sydnety Morning Herald

Financial stress is widespread for Australians.

Financial Mindfulness released its latest Financial Stress Survey and the results showed just how much damage financial stress is causing. The Sydney Morning Herald covered the story.

Nearly one in three Australians is feeling financially stressed, with damaging effects on mental and physical health and social relationships.

The CoreData/Financial Mindfulness Financial Stress Survey of 1000 people found 30 per cent of people reported financial stress, and the problem affects all socio-economic groups.

Marian Russell, from North Narrabeen on Sydney’s northern beaches, knows the feeling well.

Her husband, Zac, 28, works long hours as a carpenter while Ms Russell, 24, looks after the couple’s two children, Allegra, 2, and Bodie, 1.

Marian Russell with her two children, Allegra, 2, and Bodie, 1, at Warriewood beach. Credit: Daniel Munoz

The family lives pay cheque to pay cheque and struggles to pay off a debt they acquired when they bought a vehicle for Zac’s work.

“This week we literally had $30 after all the bills were paid. It’s sad but we’ve got to be thankful we’ve got food in the cupboard,” Ms Russell said.

“It’s taking its toll, not just on our relationship but emotionally, on myself. I have anxiety and depression and it doesn’t help not having my husband around because he has to work six days a week to keep food on the table. It’s a lot of pressure for a young mum.”

Ms Russell said her husband found it hard to switch off from work and the couple rarely get to go out together. Her husband’s family live nearby but are away until the end of the year, so free babysitting is off the cards for now. They got married in the registry office because money was too tight for a wedding and Ms Russell has shelved her plans for study.

Marian Russell had to take her children, Allegra, 2, and Bodie, 1, out of swimming lessons because of money worries.

Marian Russell had to take her children, Allegra, 2, and Bodie, 1, out of swimming lessons because of money worries. Credit: Daniel Munoz

Her biggest fear is not providing for her children. She cancelled their swimming lessons because it cost too much, a decision that weighs heavily given the family live so close to the beach.

Ms Russell said she would like to contribute financially but if she went back to her former work in retail, the cost of childcare would leave the family only $10 a day better off. “I would love to work but it’s not worth it,” she said.

Instead she sells her art online, under the name LunaTribeDesign on Instagram and Facebook, providing some “pocket money” and a much-needed emotional boost.

Ms Russell said they were lucky to live in a good rental property but she doubts they will be able to get ahead while living in Sydney.

The financial stress survey found money worries were widespread across all socio-economic groups. Clinical psychologist Dr Nicola Gates, who was involved in the study, said people on high incomes reported financial stress as well.

“It can be over-commitment but also things can change profoundly for people,” Dr Gates said.

“A client in my practice had a recreational sport accident … he came off his jet ski and hadn’t set himself up well with insurance, so the family lost the major breadwinner just like that. So where do the school fees come from? How does the mortgage get paid? People’s financial position can be more precarious than they realise.”

Dr Gates was aware financial stress was a problem for her clients but was surprised the survey suggested it was so high in the general population.

Potential reasons include the high cost of housing, lack of wages growth, perceptions of job insecurity and the fact financial literacy has not kept up with the complexity of the financial system.

“Financial stress is very prevalent and there’s a lot of shame and embarrassment around financial stress and as a result people don’t really talk about it,” Dr Gates said. “Shame is a particularly acute risk for mental illness.”

The psychological burden of stress has a physical effect on the body, with lack of sleep and lowered immunity. And people often cope with financial stress in ways that can damage their health and relationships.

Thirty-five per cent of financially stressed respondents have used drugs or alcohol to manage negative feelings stemming from their money worries, while 38 per cent have been hurtful towards themselves or others.

Almost nine in 10 financially stressed respondents regularly miss social events because of money worries, compared with only one in five of those not financially stressed.

More than seven out of 10 people who are financially stressed regularly lose sleep because of money issues, compared with less than one in 10 of those who are not financially stressed.

And more than half of financially stressed respondents report considerable difficulty concentrating due to money worries, compared with only 3 per cent of those who are not financially stressed.

By Caitlin Fitzsimmons

Updated September 4, 2017 — 11.29am first published at 12.15am in the Sydney Morning Hearld

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Financial stress: 9 out of 10 suffering

Using mindfulness

Financial stress: 9 out of 10 suffering.

We asked you, our Financial Mindfulness Facebook family – across Australia, the United States and the United Kingdom – to take part in a survey about financial stress in your life. The results are in.

Financial stress, which comes with a strong set of beliefs, is a huge factor in your lives. Monthly bills – such as credit cards and other regular payments – disorganisation, income and unexpected expenses are the major causes of your financial stress.

Constantly stressed about money

One of the most striking findings of our July 2017 survey was that an extraordinary 94 per cent of respondents experienced financial stress – defined as “feeling discomfort and/or worry about making financial decisions” – at least “fairly often”.

A surprising 35 per cent experienced this kind of financial stress “all the time”, while just over a quarter were affected “very often”.

We also asked you a series of questions that haven’t been widely posed to the public before about financial stress. Your answers showed the seriousness of people’s struggles around money.

Why does financial stress hurt our concentration?

Because other studies have showed that financial stress can cause issues with concentration in our daily lives, we asked exactly what about your financial worries affects your concentration.

“I can’t stop thinking about debt and [my] financial struggle,” was a typical response we received to one of the questions we posed. “Thinking several things at once and always having the uncertainties and insecurities present in [my] mind. Focus is clouded with fear,” said another woman.

Similarly, this: “I cannot concentrate since money is always on my mind. Worrying about how to pay all the bills and keep the kids fed make it difficult to focus.”

Another wrote of the damage that a lack of knowledge was having for her and her partner: “Just being disorganized, my boyfriend and I have no control over our finances and we do not know where to start. We are trying to [get help] but we’re still not dedicated to [the] advice.”

Why do we deliberately avoid thinking about the problem?

We know financial stress comes with self-defeating beliefs. Our survey showed the fears behind these beliefs.

“If I think about it too much I panic,” was a typical response, while another admitted suffering from “head in the sand syndrome”.

Responses to this question revealed some real emotional distress when dealing with money: actually facing their financial problems was “too overwhelming”, “exhausting”, “too embarrassing”, “too stressful”, “I want it to go away”, “seems impossible, “it scares me and hurts”.

That makes a response like the following totally understandable: “I run away from things I don’t know how to handle.” This response seemed a bit more worrying: “It’s good to avoid thinking about it because the more you think about it, you give the problem more energy.”

From so much worry, it’s a short step to this: “It makes me depressed and not want to do anything or see any people.”

We asked about mindfulness too: what do people think it is? Interesting the least popular choice was “meditation”. The most popular was “being more aware”, followed by “making conscious decisions more often.”

How would a life without financial stress look?

We also asked exactly how people would even know if their financial had reduced, a reasonable question given the pervasiveness and complexity of the problem.

Easily the most popular option was “I would not worry about money as often”, which got more than twice the votes that “I would feel calmer making financial decisions” then “I would pay bills and meet my repayments without a problem”.

Way down the list was “I would have more money”, suggesting absence of financial stress is not about wealth.

You want to try to solve financial stress with mindfulness

Happily for us, a huge majority of respondents would try our program – which is a personalised financial stress reduction program, delivered by an app.

An overwhelming 86 per cent said they would trial a free app or web-based platform that combined financial education, mindfulness sessions and goal-setting in an attempt to reduce their financial stress.

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Mindfulness could complement CBT interventions for depression

Retirement Orange

Mindfulness could complement CBT interventions for depression.

Anyone who has been truly depressed understands how vast the difference is between knowing it’s helpful to talk to people and regularly being able to connect with others.

Depression, and its nagging stablemate, anxiety, often render a person so exhausted and full of self-doubt that it feels impossible to escape the prison cell of their own thoughts.

Anhedonia is a common symptom of depression, which is the loss of the ability to experience pleasure – emotional flatlining. A mindfulness practice could hold a key of sorts to that prison and even help sufferers to begin experiencing more fulfilling relationships in their lives.

But such a healthy change might not come about by doing a mindfulness alone, although multiple studies confirm its effectiveness in alleviating the symptoms of depression. The idea here is that mindfulness could complement and even enhance the effectiveness of specific Cognitive Behavioural Therapy interventions for depression.

The positive effect of ‘daily uplifts’

New research done in New York, by Lisa Starr, of the University of Rochester and Rachel Hershenberg, of Stony Brook University and published in the Journal of Clinical Psychology found that positive events in real-life conditions had a greater positive impact on sufferers of depression than in laboratory conditions.

They wrote: “experiencing or even just anticipating uplifting events in daily life was related to feeling less depressed that same day”. The researchers called these “interpersonal uplifts”, such as participating in fun activities with friends or family.

“It’s the social activities—positive, everyday experiences that involve other people—that may be most likely to brighten the mood of those struggling with depression,” Starr wrote on the University’s of Rochester’s website. “The same is true for the expectation of good things to come,” although Starr noted people with depression are actually less likely to anticipate positive experiences. The study included 157 young adults, a third of whom had depression ranging from mild to severe. Sandra Knispel, writing on the University website concluded: “In other words: If you’re feeling seriously blue—make a concerted effort to do something fun with friends.”

Overcome negative thinking with mindfulness

Of course the advice ‘just do something fun with friends’ is easy to say but might feel impossible to do if you are bound by negative thinking, especially about yourself.

This is where mindfulness could help enormously, says Marc Richardson, psychologist for Financial Mindfulness who also works private practice in Sydney.

“Self-recrimination does lead to greater levels of worthlessness which compounds our unwillingness to engage in those interpersonal events which have really clear effects on brightening the mood. It’s hard to access those events when the overwhelming sense is ‘I’m worthless’.

“Mindfulness is about lifting our level of awareness and that improved awareness would give us the ability to notice the negative thoughts which are such a big part of depressive symptomology.

“Mindfulness has the capacity to act as a circuit breaker to rumination on negative thoughts, allowing us to catch those negative generalisations and challenge them, and make us more willing to engage in those activities we know are beneficial.

Richardson explained how that process could also help anxiety sufferers too.
“Depression is closely aligned with anxiety and in both people tend towards living in a future-oriented state rather than a present state. They will typically worry a lot about what might happen next, almost with an impending sense of doom.

“Mindfulness brings us back to the present moment and allows us to connect with the here and now rather than identify with our negative projections.”
Richardson believes a mindfulness practice could allow us to make decisions to follow through with, or perhaps even plan, those ‘daily uplifts’, such as meeting with family and friends for healthy fun activities.

“The more people engage in mindfulness, the more self aware they will be. That greater capacity to be present will surely improve our capacity to be in relationships.”

What ‘fun’ activities?

If you are depressed or anxious you might well ask ‘what sort of activities?’ In the end that will come down to you: who do you feel happy around, what do you like doing that lifts your mood naturally? You are best advised to talk to a therapist or loved one, or journal, to work this out. But here are some suggestions:

  • Arranging and having a coffee/tea and a chat with a trusted friend once a week
  • Phoning a family member you have a good relationship with once a week
  • Volunteering somewhere in your local community for 4 hours a week where the work involves helping someone who is likely to be grateful for the company / help
  • Taking the opportunity to chat in a friendly way to someone on public transport, if that opportunity presents itself)