The pandemic put young families under a huge financial stress burden

Even if you don’t have children, you may be aware through your friendships and networks of the burden that the Covid-19 pandemic has placed on families.

Parents had to somehow find time to simultaneously work from home, manage, motivate and teach their children all day long – losing most of the very little time they had to themselves.

Many had to work into the evenings to complete their paid work, resulting in lost sleep, or cut their work hours, resulting in reduced household incomes.

The stress placed on those parents was literally extraordinary – and it was widely reported to be leading in some families to relationship breakdown.

Now new research has emerged showing that families with children – especially young children – appear are a cohort facing some of the highest levels of financial stress.

A Melbourne University study, done in in collaboration with the Centre for Community Child Health at the Murdoch Children’s Research Institute, and the Brotherhood of St Laurence, found over two thirds (68 per cent) of Australian families with children under the age of five have persistently reported barely being able to make ends meet – or worse – during the pandemic.

The data came from Melbourne Institute’s Taking the Pulse of the Nation which surveyed about 1200 Australians aged 18 and over every two weeks between June 2020 and September 2021.

It found that stress was not diminishing with an end to the pandemic in sight.

The proportion of these families reporting high levels of stress has risen in September 2021 to 37 percent, compared with 34 percent a year earlier, the study authors found.

Just under two-thirds (63 per cent) of families with older children and 60 percent of families with no children at home reported financial stress during the pandemic.

The reported financial stress was worse for families living in ‘moderate’ levels of poverty.

The survey’s authors found the last 12 to 18 months has likely exacerbated the financial problems faced by those living in poverty or on low incomes.

Poverty is not the only cause of financial stress – it is possible to suffer from profound financial stress at average or higher income levels – but it is undoubtedly a factor.

Financial stress can arise during short term specific financial demands such as change in employment, or from a chronic and long-term financial concern, such as increasing debt with interest repayments or difficulty repaying a home mortgage.

The problem with financial stress is that it does not just impact our finances, it can have a significant effect on our wellbeing including our physical and mental health along with our relationships, work, behaviour and potentially our environment.

Financial Mindfulness research has shown that you haven’t got financial security, you actually can’t meet your health requirements and that financial stability has an impact on health and wellbeing.

Our research also showed 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.

‘Financial security is a fundamental aspect of health and wellbeing, and some people say it’s a fundamental right,’ said Financial Mindfulness’s Dr Nicola Gates.

According to the Melbourne University study’s authors, higher levels of reported stress by families with young children is likely to be associated with the challenges presented by the pandemic, including limited access to childcare and schooling, especially in areas that have faced continued lockdowns.

‘Having to balance working-from-home and caring for children inevitably leads to changes in hours worked and/or employment circumstances,’ wrote Professor A. Abigail Payne, University of Melbourne.

The study’s authors saw big implications for children’s’ development in families living in poverty.

Critical to shaping and supporting children’s futures is their family’s ability to afford essential goods and services.

There is a broad consensus that early family environments are the main predictors of children’s cognitive and non-cognitive abilities.

‘The pandemic should be a catalyst to consider how those living in or dangerously close to poverty can be better supported,’ wrote Professor Payne, noting that statistically poverty is persistent.

She noted community and peer support networks could be utilised to supplement government policies and programs.

‘Have we sufficiently considered the importance of providing a financial helping hand during particular periods of need that can result in positive outcomes over both the short and long term?’

Follow this blog and know How to Reduce Financial Stress in simple ways.

The current blog tries to look into financial stress and find out solutions related to the problem. Every human being aspires to gain financial independence. In times such as these, facing financial pressure is a reality. The typical mindset says that the more money you can earn helps to keep you are satisfied and stress-free. Let me tell you, that is not a reality. If you want to know How to Reduce Financial Stress in effective ways, get to us at Financial Mindfulness. Check out the various mechanisms that will help you to cope up with this kind of stress. If you need any help, do feel free to consult the experts who are thoroughly trained in this field.

Overall any stress can affect your health, both mental and physical. Financial issues can give rise to pressure that can be labeled as toxic. Let us talk about some of the ways that can affect your health:

1. Problems in healthcare: Scarcity of money often makes people neglect their health. We know it is often said ‘Health is wealth,’ but at times when you face a financial crisis, you tend to overlook the most important aspect of your life. People try to include homemade remedies which may provide temporary relief, but these are not long term solutions. Learn How to Reduce Financial Stress and at the same time take care of your health from the experts at Financial Mindfulness. Check out the various ways that are discussed and expert opinions and apply the ones that seem the most useful.

2. Mental health issue: There have been many cases where it has been found that the mental health and financial status is interlinked. If the financial condition is found to be unstable, then it has adverse effects on mental health. Gradually problems like depression, anxiety, and the likes of health conditions set in. Get to know all the easy and effective ways of Reducing Financial Stress from the team of professionals who have the expertise in Financial Mindfulness. Check out the official website and get in touch with the team. We will be delighted to help you out. We hope you have a good day. Keep safe and remain stress-free.

3. Physical Health: Stress can have an impact on physical health as well. Maintaining a healthy equilibrium between mental health and physical health is of utmost necessity. It has been found that shortage of financial security has given rise to stress that have a significant effect on the whole. Migraines, sleep disorders, and many more abnormal physical conditions are found. Learning How to Reduce Financial Stress in the most effective and straightforward ways from the connoisseurs at Financial Mindfulness is easy. Check out the official website, and we are sure you will find all the useful and strategic information stored with us. We look forward to interact with you soon.

4. Problematic Coping Behaviour- Behaviour in people is affected due to financial stress. Due to financial stress, people tend to resort to certain habits that are dangerous to their health. Such habits include overeating, binge- eating and even resorting to alcohol. A large percentage of people have been found to consume unhealthy food items to cope up with stress. Allow Financial Mindfulness to help you fight out How to Reduce Financial Stress. Head over to the official website and check out in details. We are sure you will find the most useful ways. We are here for you.

What are the various ways you can cope up and reduce your financial stress? Check out here!

Difficult times are inevitable in life. While facing a crisis, you may find it hard to visualize any way to tackle your financial stress. However, it is very important to think and assess the situation. It is never too late to learn any skill and also applying it. Here are some of the ways that can help you know How to Reduce Financial Stress. Check this out!

1. Extra Income- this is very important. Make sure that you do not stick to only one source of income. Acquire enough skills in various avenues that attract you and try to gain financial support out of these streams. If you feel that you have a shortage of money, turn your hobby into a side hustle. This will help you keep engaged in an additional vocation without creating an extra stress.

2. Take control over your expenses and revenues- More money certainly does not mean happiness. It is a continuous process of the incoming and the outgoing money from your bank. You need to be very careful about where you want to place your money and in turn, devise methods of How to Reduce Financial Stress. There is always a need to keep a check over the money and channelize it in the best way possible.

3. Spend on items that are immensely essential- Cut down on your extravagances if you are experiencing a financial setback. May be clear the debts if there are any. Make a list of expenses that are not extra but essential. In this manner it will helpful to channelize the money and keep the financial stress off for a certain period of time.

4. Lessons from financial tools- Financial management is a huge task. It is always advised to know about any financial dealings before you can actually get your hands on it. Choose a particular financial tool like medical insurance and become thorough with all the aspects of it. We at Financial Mindfulness will help you know all about How to Reduce Financial Stress in the proper ways.

5. Do not compare- Please do not compare yourself to others. Everybody has his/her demands and wishes. Each individual is different. Try to chalk out a plan for yourself. This will help you tackle the Financial Stress and Mental Health. If you want take expert advice from the team at Financial Mindfulness. Check out the official website. We wish you good luck with managing your finances and leading a tension free life.

6. Identify the cause of your stress- This is one of the most important and the primary step to tackle any kind of stress, be it emotional or financial. Once you have successfully completed this step, it becomes easier to sort out a plan and work on it. Get to the official website of Financial Mindfulness and learn How to Reduce Financial Stress easily.

Easy ways to know about Financial Stress and Mental Health are right here!

In a grief-stricken world by the raging pandemic, it is pretty natural that our lives have been affected in a way like never before. Our methods of working and the way to look at the world have changed drastically. When there is no limit to the number of deaths that are taking place daily, it is but natural that people around the world are facing a crisis. This article is dedicated to talking about Financial Stress and Mental Health. Here we will help you understand the basic causes of the particular stress. Apart from that, we will also help you out with the remedies to the ever-growing problem. You can visit the official website of Financial Mindfulness and get in touch with a group of experts. We are here to help you out.

Financial stress is stemmed from money. It is the shortage of money but sometimes not knowing where to invest the money to keep it safe also causes a lot of trouble. There are times when financial stress can result in affecting an individual mentally. Learn how to deal with Financial Stress and Mental Health in simple ways from the experts at Financial Mindfulness. Check out the details and stay safe.

The following tips will be helpful to keep a check on the financial stress and take care of the mental health:

1. Create a routine of self-care- Due to the pandemic, there has been a constant fear in people’s lives, which has been given rise to a different lifestyle throughout the world, which is fashionably called the “new normal.” This is done to provide a ray of hope to the people across the globe. The phrase new normal has been used to look at life and give a fresh start to it. People should take this opportunity to create a new routine of self-care to help them take control of Financial Stress and Mental Health. Try engaging in activities that are indoors but at the same time are interesting enough to keep you occupied. Take care of your sleep schedule and try to get enough sleep to keep you feel fresh throughout the day. If you want to do something challenging, you can try out learning a new skill and try excelling at it. Try to include simple physical exercise.

2. Connecting with friends and family virtually- Connections nowadays are of utmost importance. In such times of medical emergencies, you never know when the need for a particular service might crop up. If you remain well connected with the family members and check on them at regular intervals, the feeling of isolation might seem lesser. Engage in Skype calls and zoom calls to provide hope to each other. Find out more ways to deal with Financial Stress and Mental Health from the officials at Financial Mindfulness. Check out the various links that provide help to people worldwide. Help is just a click away. Make sure you are connected to the different societies that might need help.

3. Online Therapy- Since everything has turned online, you should make the most available online therapies. Sometimes speaking it out to an expert might help you gather knowledge and find solutions regarding the problems you are facing. There are individual therapy sessions as well as group therapy sessions. You can engage in online sessions till the situation is brought under control. After that you can join in a counselling course offline. This will help you tackle Financial Stress and Mental Health.

4. Government Programs- The government has launched various programs related to how to combat the trauma of the COVID situation. Some of these include economic impact payments, extended unemployment benefits. Make proper use of the help that is made available. These can be stressful if you do not know the correct ways of processing these programs. Reach out for help if you are in need any get informed thoroughly.

5. Understand the money you are using and use it wisely- Money is directly proportional to financial stability. Make it a habit to think and check out the ways that you can stop spending more than that is required. Keep a record of what you spend on and try to cut down on your expenses if possible. Seek out Financial Stress and Mental Health solutions with the professionals at Financial Mindfulness.

6. Stay motivated- A positive lookout and mindset helps to fight battles like no other. Always try to find out something positive from your actions. Spend wisely. If you have debts to clear, make sure you do them only after repeated calculations.

7. Avoid Alcohol- Getting addicted to alcohol is one of the common problems people face while they are not being able to manage their finances. It might provide a temporary relief, but later on, it might get all the more difficult. The monetary expenses might create Financial Stress and Mental Health issues. Seek help while it is not too late. We are here to help you know How to Reduce Financial Stress? Check out the official website of Financial Mindfulness and learn more about it. We look forward to hear from you.

What are some of the signs that imply that you are facing financial stress?
Here is a list which helps to determine if you are suffering from monetary stress. Read it up.

1. Loss of control: Activities are not under the control of the individual. You might end up doing things that give you momentary pleasures to keep your problems at bay. This is a temporary way to deal with Financial Stress and Mental Health.

2. Loss of concentration: Every work needs the right kind of concentration. There are time limits that are set for each task to be completed. Without the right level of concentration, we cannot focus on our job. This might cause financial loss and in turn set in stress. If you face such problems, this might signify mental health issues. If you wish to learn more about the ways to tackle Financial Stress and Mental Health get to us at Financial Mindfulness. Please check out the official website and get to know more.

If you are interested in learning quick and easy ways of How to Reduce Debt please check this blog out!

Finance is a large part of a person’s life. Who doesn’t require substantial amount of money to lead a happy and fulfilling life? Everybody does, right? When someone faces a financial crisis, they take help from institutions that can help them out. In this article, we tend to discuss various ways of How to Reduce Debt.

The first thing that you should know is what is debt? Let us find out in detail. In simple words, debt is defined as an amount of money that is borrowed by one party from another party in order to make payments that seem difficult to do so under normal circumstances. It is interesting to note that the money that is borrowed with the condition that it is always paid back with the added interest at a later date.

Interestingly, there are various types of debts, and each one is different from the other. If you get a complete knowledge of what these debts are and how you can handle them it becomes easier to learn How to Reduce Debt effectively.

So what are the various types of debts? Find them out right here!

There are different types of debts. It is not only for a single purpose that a person borrows an amount of money. Since the idea is different, so the name also differs. This is done to segregate one kind of debt from another. It becomes easier to understand why a particular debt is taken and also needs to be paid off within the stipulated time. So let us check out the variety of debts and their meaning.

Secured Debt This type of debt can be defined as any debt that is issued against any asset that can be defined as collateral. In order to know How to Reduce Debt it is important to know that a credit check is needed in order to understand how well the debt has been handled in the past. If the person who is borrowing the loan fails to repay the debt then the asset is to be handed on to the lender. A classic example of secured debt is a car loan. Money is supplied to buy the car but also claims to get ownership of the title of the car. If the money is not returned, then the lender can repossess the car. The rate of interest of these loans is quite reasonable—Trust Financial Mindfulness to learn How to Reduce Debt.

1. Unsecured Debt

This loan comes without any collateral. When any amount of money is lent without any asset attached, the money is leant purely on the belief that the borrower will repay the loan with the added interest. A contractual agreement is made to repay the funds. If there is any delay or default in the payment, the lender can ask for any money he wants. This can be done by taking legal steps. Examples of such debts include credit cards, medical bills, credit cards. Get to know How to Reduce Debt effectively from us at Financial Mindfulness.

2. Mortgages

This is the most common type of debt that people carry with themselves. Do you know why mortgage loans are taken? It is generally taken to buy homes. In this case, the real estate serves as the collateral. It is interesting to note that mortgages have the lowest rate of interest. The interest is tax-deductible for the people who itemize the taxes. You can pay for 30-50 years every month for your mortgage loans.

If you are interested in finding out about the other types of debts, please check out the official website of Financial Mindfulness. We will help you to figure out How to Reduce Debt in the most effective ways.

So what are the ways that will help you reduce your debt? Check it out here!

It is always a pragmatic thought that you should have enough funds to make it through for your leisure life when you retire. This is the forethought of a person when he is working so hard throughout his life. There are various ways that will help you stay debt-free and enjoy a pleasant life. Let us look at the ways you can avail a debt free life.

1. Start a debt management plan- This includes prioritizing the debts in order of urgency, creating a healthy budget, cutting down on extra spending, etc. How to Reduce Debt knows your entire budget.

2. Set a budget- Always check how much income you make monthly and y9ur monthly expenditure. This is very important. This will help you to manage your debts if you have any and enjoy your life as well.

3. Avoid using your credit cards- Please try and use cash whenever possible. The logic behind this is simple. If you pay in cash, you will tend to think before you spend.

4. Save as much as you can- It is highly recommended that you stop spending on things that are not very necessary. It is very tempting to do away with this habit, but once you try your best, things will indeed work out in your favor. There are simple ways you can design for yourself to save on monetary spending.

If you wish to learn more on How to Reduce Debt, please visit Financial Mindfulness and check out all the tricks we have in store for you. We will be glad to help you out. In addition, there are various exciting and accessible ways regarding How to Manage Credit Cards. So if you want to be effective and financially secure, get in touch with us right away.

Managing financial stress: Goals, mindfulness and monitoring progress

In the second part of our financial stress webinar covering managing financial stress, we look at goals, mindfulness, and monitoring progress with expert help from Lea Clothier, a Master-certified behavioural money coach involved in the development of the Financial Mindfulness program. Part one looked in detail, decision making, literacy, and learning new skills.

Setting financial goals

By definition, moving forward – out of financial stress – means we have to do things differently.

“If we stay where we are, we’re going to get more of what we’ve got,” Ms. Clothier says.

The reason for setting financial goals is because they can help unlock genuine and transformative behaviour change.

The theory of behaviour change is that we need to be motivated to make changes. Setting goals is a way of taking early but clear steps towards change.

“These goals can be tiny, or they can be very significant. I’m a big fan of what they call small but significant goals,” says Ms. Clothier.

One type of goal is a milestone – reaching a certain target of savings or being able to afford something we’ve targeted, like the deposit to buy a property, or fund a small business.

On top of the achievement of reaching a goal, the very act of setting financial goals can actually help reduce financial stress because it makes us feel a little more positive about our money.

“We can start to see the progress that we’re taking away from what we don’t want, towards that which we do want,” Ms. Clothier says.

In setting financial goals it’s a good idea to nominate an ‘accountability partner’ and make them part of your process.

That is a person to check in with around your progress.

The more you think about how you got into financial stress – this point where major change is necessary – and reflect on your history of self-defeating or disorganised behaviours with money, the more you’ll see accountability is essential in changing your relationship with financial stress.

It’s important to note things may not happen quickly. Making a meaningful change that can be sustained for a lifetime will probably be slow.

It is also just a reality that we are likely to go through periods of not seeing any changes or slipping back into old patterns with money.

That might seem depressing, but depending on your perspective and openness to change, the re-emergence of old habits is an opportunity.


We have a clear choice: we can slip backward and give up or re-evaluate our goal, our process and perhaps set a new smaller financial goal.

Small financial goals and milestones are also rewarding.

It’s well-known by experts in goal-setting that most goals consist of smaller tangible goals, like stepping stones on a path.

“I’m also a fan of doing something physical to acknowledge reaching goals,” says Ms. Clothier.

“Whether that be like marking off a calendar every time you complete payment towards debt or colouring in a picture that has 52 elements of savings that you’re doing weekly over a year.”

This is important and useful because our relationship with money has become even more abstract than it was: very often we don’t even see or touch money in our cashless society.

Because so many transactions have become contactless or online during the pandemic the likelihood of not carrying any cash at all has increased for millions of us.

“We have lost that connection to the reality of our physical relationship with money,” she says.

“That money ‘disconnect’ is very real and it helps our ability to reach financial goals if we can get back a sense of connection to money.”

We are more likely to think of concepts and issues every day if we feel connected to them.

Discovering the power of mindfulness

Lea Clothier trained as a meditation and yoga teacher when she saw clients to her money behavioural coaching business were suffering acute stress.

“When they started to talk about money, they talked about their hopes and dreams with cash or their actual reality with money I could see that it was stressful, and I could see that stress was directly linked to their wellbeing,” she says.

Financial stress is a type of stress, and as we discussed in a previous blog which means it responds to a range of stress reduction techniques, including mindfulness.

Mindfulness – which at its most basic is about bringing our awareness to the present moment – is an important stress reduction technique.

“It means we are paying attention; we’re fully invested in this very moment,” Ms. Clothier says.

“We do that through the application of our five senses. It means that we start to pay more attention to our touch, our sight, what we can smell, hear and taste.”

“By doing that, we get out of that hectic, noisy head of thoughts that all of us have.”

The power of mindfulness with money is it’s two-fold.

It means we need to bring our full attention to our finances.

We need to pay attention to what’s going on in our bank accounts, with our spending, in how we earn money, and in the way that we interact with money every time we use it.

Mindfulness also has the power to help to reduce our stress levels. It is known and proven to be able to reduce cortisol, the stress hormone.

There is also research to show mindfulness can actually increase the density of the pre-frontal cortex, also known as ‘the thinking brain’.

This is important because our responses to money are so often based on how we feel and our emotions.

This means that we’re reacting when we’re interacting with money; we’re not responding. We’re not making logical, clear, calm, well-thought-out decisions.

“For me, mindfulness is like a superpower when it comes to our finances,” Ms. Clothier says.

“It’s a way to slow down and give provide enough space to practice better decisions and practice a better way to manage money.

“Think about when you’re in the shopping centre, and you’re about to buy something.  You’re not thinking much about it, you just like it, you’ve seen it and you want it.”

“You go to the counter, you tap as you go, you walk out, and as you leave, you get in the car, you go home. You get home, and you go, “Argh, I probably shouldn’t have bought that. I don’t have the money, and I’ve got those bills coming up.”

The emotional part of the brain reacts seven seconds faster than the thinking part. It’s unlikely we would turn to the knowledge gained in improving our financial literacy in that time.

But we can just stop.

A mindful approach with money in that situation would involve, slowing down our actions, and stopping before tapping the card, taking a breath, and checking in about how important the item really is?

The same can apply to investing in the share market, or lending money to family or friends for them to invest.

But by approaching and adopting mindfulness, we just slow everything down, and we don’t react.

“We can stop and consider the repercussions of any decision or action before making it.”

How to measure and monitor our progress

Very few of us know how financially stressed we really are. We need to have some kind of idea of this before we really know what progress looks like.

To measure financial stress, we need to look at more than just our bank account balances.

The context for how we spend, why we spend, and what we spend it on matters a great deal.

“Think to the gym and doing a fitness assessment before you get there,” Ms. Clothier says.

“Where you’re sitting with your PT, and they’re saying okay, ‘tell me about your diet, tell me about your state of mind, your sleep patterns, tell me about your exercise routines.”

“It’s the same concept as that, except it applies to your relationship with money instead of food or exercise.”

Financial Mindfulness developed the Financial Stress Index (FSI) as a way to measure and monitor the financial stress of individuals and groups of people in detail.

It is contained within the Financial Mindfulness app and measures the levels of financial stress on five dimensions with suggested solutions for individuals.

These are the financial status, the physical and psychological burden, the social engagement, the psychological impact, and the behavioural signs of stress.

The score given to each user is a starting point, a baseline.

Returning to doing the FSI every 30 days or more allows users to clearly see their progress across the five dimensions.

Managing financial stress – Decision making, literacy, learning new skills

In the first part of our financial stress webinar covering managing financial stress, we take a detailed look with expert help from Lea Clothier, a Master-certified behavioural money coach involved in the development of the Financial Mindfulness program.

There are so many triggers to create financial stress in our lives today that reducing and managing financial stress has become an ongoing, sometimes daily task.

Thankfully financial stress as a specific type of stress is finally being acknowledged and a number of different methods are available to deal with it.

There are a variety of well-practiced stress reduction techniques which we can use to help address financial stress.

These include exercise, maintaining positive routines, and getting curious about the things that do reduce your general stress – for instance, short walks and/or short meditation sessions.

The Financial Mindfulness app is a proven, evidence-based tool for reducing personal financial stress that packages together some simple but extremely relevant tools:  mindfulness, goal-setting, and financial literacy.

Its development has enabled us to tread new ground in the measurement of financial stress.

Why you need to get organised – on many levels

Reducing financial stress on day-by-day and week-to-week levels can be complex, with accounts, different income streams, expenses, taxation, investments, and other factors to manage.

So, developing personal systems that work for you is essential.

Being disorganised with finances will invariably lead to an increase in financial stress.

But getting organised with finances also means aligning what we think and how we feel with our actions.

“I constantly see with the clients I work with that someone might know that they need to start a budget,” says Ms. Clothier.

“They take action or the behaviour of implementing a budget. Yet on a thinking level, they have some challenging and limiting beliefs about budgeting. And then, on an emotional level, they feel disempowered, or they feel restricted, so whilst we’re taking positive action of budgeting, we’re not aligning that with positive thoughts and emotions.”

“And then we wonder why we don’t get the results that we’re seeking.”

The answer to this is to explore your relationship with money and your beliefs about it – including beliefs that might be holding you back.

Our relationships tend to be a good place where our money beliefs and values come to light.

For some people, it may be useful or necessary to do more personal work on these issues with a financial counsellor, a financial wellness consultant, and/or more specialised therapist.

Moving forward, there are many ways and means to manage financial stress, as we said.

This blog will cover a handful of tips, tools, and techniques that Ms. Clothier has found most useful in her work.

Accepting past decisions

Money is an emotional topic. Just look at the importance of it in almost everybody’s lives, that importance can create strong emotions.

“Like it or not, we are where we are today because of past experiences, decisions, and actions or past inactions or indecision,” Ms. Clothier says.

We have to accept the past and move forward.

Yes, there may be greed, shame, guilt to feel and let go of.

It can be painful to confront difficult emotions, but that’s normal too. Trying to not look at these emotions doesn’t work as a long-term strategy, even if it’s appealing.

At a practical level, our decisions are often made on habit.

When the habits are mindful and not reacting – especially to emotions – our trajectory with finances is usually positive.

But if our money habits tend to be reactive and we spend as a reaction to feelings and even urges and impulses, our money problems are usually chronic.

Accepting past financial decisions isn’t easy, but it’s important.

“We can make peace with the past; we can learn from the past, and then we can move forward and make better decisions,” Ms. Clothier says.

The importance of financial literacy

Don’t take this personally, but levels of financial literacy in Australia are “abysmal”, Ms. Clothier says.

A recent Melbourne University survey, the regular Household Income Labour Dynamics in Australia (HILDA) survey found that half of the respondents could not answer five simple questions about inflation, interest rates, compounding, and diversification correctly.

We are not saying you can’t answer those questions, but the point is financial literacy is fundamental, it underpins most of your money choices.

Again, remember how important money is to our lives, and our ability to make choices – it pays for our day-to-day lives and sets up or potentially undermines our futures.

Even worse there is a frightening gender gap relating to financial literacy. One in three female respondents couldn’t answer any of the HILDA questions.

Most fundamental lessons people learned about money were learned in the home, and partly by watching and learning.

Schools are getting better at teaching financial literacy today, thankfully. The media also contains a lot of information about finances in the form of clips, podcasts, articles, and blogs, such as this.

The good news is that there are many tools out there, free websites, free content, classes, books, and podcasts that you can listen to increase your financial literacy.

“I always say that learning finance is like learning a new language,” Ms. Clothier says.

“You speak the lingo, and once you know the speech, it makes it a lot easier.”

Learning new financial skills

Continuing on from the above point, learning new financial skills is an important way to help us manage financial stress.

Knowledge is only powerful when it’s applied, we actually need skills to get the most out of our knowledge.

Even if we know certain key facts and believe in a course of action, we can still slip up because money is so emotional.

For example, we know we should spend less than we earn. We know we shouldn’t big amounts of money on our credit cards.

We know we should be looking at our financial statements and bills and budgeting regularly.

But just because we know those things don’t mean that we do them.

“This happens because money is emotional and because it seems difficult,” Ms. Clothier says.

The problem is many of us don’t have the skill levels needed to practice good day-to-day management of money and financial stress.

“Learning new financial skills can be a straightforward way to reduce our stress levels,” she says.

It’s building a habit; it’s making a unique knowledge and skill base.

It can involve something as simple as learning how to manage a credit card better.

Or even how to manage and read a credit card statement.

“I’m often surprised how many of my clients cannot read a credit card statement and understand the impact of only paying the minimum balance on an ongoing basis and what that means to them,” Ms. Clothier says.

Starting to build those skills from a basic level up to a more advanced level can help create a better and healthier relationship with money.

Next week: How to manage financial stress part 2 (using goals, mindfulness, and progress).

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.

What to do if lockdown has caused me financial stress

Right now, millions of Australians are under public health orders to stay at home in an attempt to reduce the spread of the Delta variant of the Covid-19 virus all around the country.

More than half of all Australians face this uncomfortable but necessary reality, and it is producing feelings including loneliness, fear, worry, depression, and stress.

The unprecedented – and extended – interruption to normal life has worn so thin that for many, it’s starting to feel like a depressing new norm.

Uncertainty and fear were defining characteristics of the pandemic from the outset.

The uncertainty isn’t something we can do much about: nobody has a crystal ball.

Fears are a little more tangible. We fear for the health and safety of our families and ourselves.

Thankfully, there are plenty of official and expert resources to help people deal with their mental health during the pandemic.

Here’s a great government link with plenty of advice and links to specific types of support.

The respected Black Dog Institute has produced 10 tips for managing anxiety during Covid-19.

We suggest you use these links if you need them.

People also fear for their finances, and this isn’t just a ‘first world problem’; it’s real and much deeper.

While some of us are saving because we are not going out, the lockdown means many people cannot get to work and have lost hours, and therefore, their wages are reduced. In mid-August, it was revealed 150 child care centres closed – all have staff, and all those staffs lost wages.

In 2020 Australia experienced negative wage growth due to the pandemic-led economic downturn.

Or even worse, some have lost their jobs. This is acknowledged by the government’s latest round of Covid disaster payments.

Everyone losing wages or their job will experience financial stress, sometimes at an acute level, and if these changed circumstances persist or worsen, the financial stress will likely become chronic.

Fearing for our financial security shakes us to our core; for many of us, it feels like it’s about our very survival, even a matter of life and death.

Financial stress has moved from a fringe issue to a serious, even core problem. It is acknowledged by the likes of the Black Dog Institute’ managing financial stress during lockdown.’

‘Mental and financial health can be a vicious cycle,’ says Black Dog. ‘Financial instability can lead to poor mental health, which can make taking action to protect your financial situation harder.’

‘When people are under pressure, they may start drinking more or avoid talking to family and friends, which can make it even harder to cope.’

This blog looks at financial stress during Covid lockdowns – why we feel stressed, what we can do with financial fears, and what practical steps we can take.

Why do we feel financial stress during lockdowns

Hamish Ferguson, a Director at Vision Property and Finance, says it’s important to acknowledge that feeling financial stress during a lockdown is to be expected.

“Lockdowns introduce unpredictability into our lives. One of the requirements of effective cashflow management is being able to predict both your future income and expenses.”

There is a saying that in the absence of good information, people will make poor decisions.

There is a lot of emotion in the community, and at times misinformation spreads. This poor-quality information can affect people who give it too much attention, and some will either not look after themselves or spend too much money thinking that this is an excellent way to reduce stress.

‘Many of us will spend more money when we have higher levels of emotion,’ Mr. Ferguson says.

‘It is quite clear that emotion levels in society are higher, so this will produce binge spending or emotional spending at a higher level.’

What can we do about our financial fear during a lockdown?

Practicing mindfulness is not just about sitting down to meditate, though that is recommended.

Mindfulness is actually about paying attention to thoughts and feelings and is said by experts to resemble curiosity as a state of mind.

So be curious about how your spending patterns are changing and where your money is going.

That helps us achieve financial mindfulness, which is simply described as having awareness and paying attention to your finances and financial behaviours.

It means more than being money smart or financially savvy, as it includes the capacity to regulate emotional responses that can lead to unhelpful financial behaviour and financial stress.

‘One of the strategies that many professionals will suggest is to break down the information we receive into what we know to be true and separate it from what may or may not be true,’ says Mr. Ferguson.

This can help us to focus on more reliable information.

Another strategy is to focus on verbalising things we can be thankful for when stressed or anxious. For example, are you safe at home, and do you have good home-cooked meals and a relatively comfortable environment where you live?

Being thankful can help to balance the information we are receiving and not just focus on the negative.

An example of the power of positive thinking is that rather than just thinking “I might lose my job”, to say to yourself, “Last time this happened, my employer and the govt worked well together to enable me to keep my job. I don’t have any reason to think that this won’t happen again.”

We’d also suggest turning off the television, or the online and social media news updates, as often as possible.

Constant updates on Covid are not helpful to most people. Information from sources of dubious origin is even less helpful.

‘Sometimes we just need to switch the world off and enjoy the silence,’ Mr. Ferguson says.

He suggests reaching out to people in your community going through similar experiences, for example, work colleagues, family friends.

‘Especially reach out to those people that you see as positive or “glass half full”. They are more likely to help you balance your thoughts,’ Mr. Ferguson says.

What are some practical steps we can take

In a period where our emotions are potentially impacting our financial behaviour, especially in a negative way, it’s time to take a step back and look at the basics.

“Review all spending to ensure you are focusing on needs and not wants. Strip your budget back to bare basics,” says Mr. Ferguson.

He suggests focusing on identifying the real fears or stress points and finding someone to help you work through those.

“Community and communication are very important.”

If you are not budgeting or haven’t reviewed your budget for a while, then it’s an excellent opportunity to do so.

Why revisit my budget?

Instinctively, we know that budgeting allows us to manage money wisely, avoid financial stress, and be in control.

During a lockdown enforced by the government, one thing we don’t feel is in control. That’s not comfortable for many people. Budgeting helps us to get back some sense of control in our lives.

Also, it’s a habit that is always helpful to our financial situation.

Even if you have a budget, here’s a reminder of the main steps to building a budget:

    • Properly determine your household income
    • Begin tracking your living expenses over three months
    • Balance your budget – subtracting all your expenses from all your income
    • Go back and review your expenses – what’s missing?
    • Review your income potential
    • Balance your budget again, this time with nothing missing!
    • Maintain your budget

Remember, most people who try to budget fail to get the benefits of a budget because they cannot maintain the practice.

Maintaining a budget involves several steps too:

    • Schedule a budget practice
    • Make budgeting a game that you win at
    • Review the value of your money and simplify your budgeting
    • Get smarter about your use of credit
    • Get real about planning
    • Experiment with ‘not spending’
    • Nominate a budget buddy and become accountable
    • Become proactive – and stay positive

You can read our complete blog series on budgeting at these links: why budgeting helps your personal finances, how to budget and maintaining a budget.

If you are still struggling with balancing your budget, you can seek support. You could consider contacting a financial counsellor or a budgeting coach for help.

Remember, budgeting is learning a new life skill; it takes practice. And at a time when you may feel worried, uncertain, or even out of control, it will help with financial fear and financial stress.

If you are struggling with your mental health, please seek help:

    • Lifeline crisis support service (24 hours): 13 11 14
    • Suicide Call Back Service (24 hours): 1300 659 467
    • Beyond Blue phone support and online chat service (24 hours): 1300 22 4636 or


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.



Mythbusting our beliefs about financial stress

Financial Mindfulness interviewed a dozen people in Hyde Park Sydney while gathering footage for a marketing video, every person we spoke to believed financial stress was all around them.

The problem is “huge, huge”, said one respondent, while others suggested 70 per cent of the population might be under financial stress. A couple said “everyone” was under financial stress; another commented that they “didn’t know anyone” not under financial stress.

Most understood that financial stress could cause, or at least be associated with, other problems in our lives, from depression to anger, insomnia, affecting our concentration and lower productivity at work, and things like social isolation.

Marc Richardson, a Sydney based clinical psychologist, says you can add “hits to your self-esteem”, relationship difficulties and a tendency to alleviate stress with drugs and alcohol to that list.

But there was little consensus among the people we spoke to – and a sense of helplessness – about how to help someone suffering from financial stress: answers ranged from providing financial advice to lending money through to just listening.

When it comes to how we interact with money, the optimum state is one of financial mindfulness.

Financial mindfulness is described as having awareness and paying attention to your finances and financial behaviours. It means more than being money smart or financially savvy, as it includes the capacity to regulate emotional responses that can lead to unhelpful financial behaviour and financial stress.

There is no doubt financial stress is a serious problem. But a key to finding solutions to financial stress is in understanding what it is – and what it is not.

Here are five common beliefs about financial stress – we assess if they are true or false.

Belief 1 – Financial stress is just another type of stress, and stress is normal (so get over it)

Broadly speaking, stress is a physiological reaction to stimulus and is not always bad. “Stress can be helpful and good when it motivates people to accomplish more,” says the American Institute of Stress, while pointing out stress is “a highly subjective phenomenon that it defies definition”.

Technically, the word “stress” is interchangeable with “pressure”, and more often, we use stress when we really mean “distress” or “strain”. Financial stress is a reaction to pressure around money, which can quickly turn to distress. This is undoubtedly partly because – thanks to consumerism – Western society tells us acquiring new stuff is a sign of success. Who would disagree that, in a nutshell, we want more than we need?

Stress can be acute, recurring or chronic. The stress of any type can feel upsetting, but chronic stress can cause illness: the longer we are under money pressure, the worse we feel. That’s where financial stress can be so damaging: it’s mentally exhausting to continually struggle with payments that have no end in sight.

If you add in the tendency to medicate our stress by spending on excesses or luxuries – especially things you won’t or cannot talk about – it’s likely chronic financial stress will take hold.

One expert on financial stress in the United States, DR J. Galen Buckwalter, has identified a syndrome called “acute financial stress disorder”. Think of all the drivers: credit cards, loan and especially mortgage repayments, stress-relief spending and for people on lower incomes, basics like food, heating and rent.

If that last sentence makes it sound like financial hardship is the cause of financial stress, not always.


Belief 2 – Financial stress is the same thing as hardship

The Australian Bureau of Statistics’ indicators for measuring financial stress include being unable to pay various bills on time and being “unable to raise $2000 in a week for something important”. However, further reading shows its indicators are pointers to “households … experiencing economic hardship”.

But that is only part of the story of financial stress: it’s likely many more people are under financial distress. Much of the stress we suffer happens because we’ve convinced we need bigger or newer possessions. Or because of rising prices of, for example, housing.

Disturbing revelations about mortgage stress in recent weeks include the news that 130,000 households in New South Wales and Victoria are spending an unsustainable 30 per cent more on repaying their mortgages. More than half of all Tasmanian households are in this position.

The maximum households should spend on repayments, according to many financial advisors, is no more than 30 per cent of gross income.

With interest rate changes long overdue and the unpredictability of unexpected expenses, spending so much money on a mortgage is a recipe for financial stress. That quickly turns to distress with major expenses or a spending habit that is hard to control.

Rent is “unaffordable” or “severely unaffordable” for the majority of people living within an hour’s drive of Sydney city, according to the SGS Rental Affordability Index (and even worse if you live in the city). This means the cost of renting for most people in or near the city puts them under “housing stress”. The situation is not as severe in Melbourne, although most inner-city rental properties qualify as “unaffordable”.

But few homeowners or renters – at least not those in regular work – would qualify for government assistance based on financial hardship, even if they are struggling to stay afloat.


Belief 3 – Everyone is financially stressed

From one extreme to the other.

When we talk about chronic and damaging financial stress – the kind defined by the Australian Bureau of Statistics’ financial stress indicators such as having trouble paying bills on time – then no, not everyone is financially stressed.

But it’s very common, and the chances are it’s affecting someone in your family or someone you interact with regularly at work. The Australian Psychological Society’s Stress and Wellbeing Report in 2019 found 35 per cent of Australians report having “a significant level of distress in their lives”.

That report found “personal finances” (49%) were the single biggest cause of stress for Australians for the preceding five years, ahead of “family issues” (45%) and “personal health” (44%).

Those numbers suggest that someone around you is financially stressed, and probably a few people.

ANZ Bank chief executive Shayne Elliott says the lender is preparing to deal with a much larger number of financially distressed customers next year as government support fades, though ultra-low interest rates will give struggling borrowers more time.

The critical question that may never be answered is why some people suffer financial stress while others faced with similar challenges do not.

The American Institute of Stress uses the analogy of people on a roller coaster to show the difficulty of predicting distress. Some people thrive on the shock and discomfort of the roller coaster experience, while for others, it’s pure torture.

“Many times, we create our stress because of faulty perceptions you can learn to correct,” The institute explains. The use of the word ‘perception’ indicates that the institute of stress believes this is partly a problem of thinking as much as anything else.

It elaborates: “all of our experimental and clinical research confirms that the sense of having little or no control is always distressful – and that’s what stress is all about.”

This suggests our personal relationship with the unexpected is a factor that perhaps a sense of helplessness determines whether we turn a normal level of stress into distress.

So, what do we do about financial stress?


Belief 4 – financial stress will go away if I have more money

A windfall or pay rise is the holy grail for the chronically financially stressed, but unless you are debt-free – or are one in a million and suddenly get rich – it’s unlikely to work for long.

Chances are, the reasons you are chronically stressed about money are more complex than how much you earn (or the state of the housing or job market), as suggested by the above. It may seem the outside world is causing your financial stress, but it’s also possible at least some of your financial stress comes from inside you.

For example, if you can be prone to impulse spending, wanting to buy the latest expensive gadget, or even have a tendency to shower people in your life with gifts, you will likely spend much of that extra money.

Or if you committed yourself to spend 40 per cent (or more) of your salary on your mortgage or rent and a pay rise gets your head above the waterline, might that extra income justify the risky decision you made to over-commit?

If a windfall were the cure to financial stress, then the ultimate solution would be a lottery win, right? Wrong. A shocking 70 per cent of lottery winners end up bankrupt, according to America’s National Endowment for Financial Education.

The truth is that the cost of living, especially in a capital city, combined with servicing debt caused by a lifestyle beyond what you need creates financial stress. Full stop.

When dealing with or preventing financial distress, it is not just about how much money you can acquire. But, unfortunately, that may be missing the point.

So, time to be honest: how much freedom do you have around your spending?

What may be causing you as much distress as the dollar figures keeping you up at night and distracting you at work is the stress itself. In other words, ruminating on the problem of ‘how do I get better with money is probably a painful process.

Perhaps it’s time to go back a step and examine your whole relationship with money?


Belief 5 – You can only help someone under financial stress by giving them money or financial education

There’s no doubt the answers to financial stress – which at least superficially presents as having trouble meeting financial obligations – has a few elements.

Some of those include effectively setting goals that promote change, learning more about how to manage money – Andrew Fleming, Founder & CEO of Financial Mindfulness says “in addition to improving financial literacy and goal setting, being self aware of your current financial behaviours, good or bad, is so important to unearth those unconscious behaviours. For example, why did I buy another phone when the one I had is perfectly fine.  I ended up paying more than I had to and the upgrade features didn’t change anything significant. It was an impulsive decision I made at the time. The clever marketing achieved is purpose at my expense.”

ANZ’s national survey of adult financial literacy showed many Australians have strong levels of understanding around money. However, there were still many people who didn’t save regularly (23%) and did not feel in control of their finances (22%).

“Those most likely to feel out of control were … household incomes of $65,000 or less with children at home and people with a mortgage of $300,000 or more and a household income of less than $100,000,” the report found.

Marc Richardson,  says; “mindfulness is very effective at shifting old, hard-to-shift negative beliefs we have about money, such as “I’m no good with money”, “spending makes me feel better” and “money is stressful”.

“Through mindfulness, we can raise awareness of our thought patterns,” he says.

“It’s only through raising awareness of when our negative emotions arise that we can develop capacities to deal with thoughts and feelings. Mindfulness is a beneficial strategy for breaking the cycle of negative thought patterns that lead to negative emotions and enhance feelings of helplessness, hopelessness, and then negative behaviours.

“In fact, without mindfulness, it would be tough for us to catch the underlying attitude which then governs our thoughts, reactions and behaviour.”