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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.

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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.

 

 

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Why women suffer more financial stress

Recent studies have found women feeling considerably more financially stressed than men – but why?

In the United States, a May 2022 study of 2,456 adults by Bankrate, found women are more likely to be negatively affected than men. Women are significantly more likely to cite money as having a negative impact on their mental health, with 46 percent selecting it compared to 38 percent of men.

Among those who said money negatively impacts their mental health, women are more concerned than men about having enough emergency savings and paying for everyday expenses (at a respective 60 percent and 59 percent, versus 53 percent each for men).

Common financial situations are also more likely to trigger negative emotions for women than men, such as checking one’s bank account (52 percent of women versus 46 percent of men) or facing unexpected expenses (73 percent of women compared with 64 percent of men).

The study also found women are more upset by events such as an unplanned expenses, when bills are due, and when bills are paid.

More women (at 41 percent) said their mental health was negatively impacted by fears of being unprepared for retirement than men (at 36 percent).

Also, the survey found that men (at 50 percent) were also significantly more likely than women (at 37 percent) to say they have stocks or stock-market related investments.

In Australia, NAB’s March 2022 (Q1) wellbeing survey found financial stress levels continue to be lower for men compared to women, and the gap has widened. Men reported slightly lower financial stress in Q1 (down 0.4 to 38.6), but it increased for women (up 1.0 to 42.6).

Women reported higher stress for all measures except credit card repayments. Relative to men, women reported much higher stress levels over home improvements and maintenance, raising $2,000 for an emergency, non-essentials, major household items, financing retirement, providing for their family’s future, and medical bills.

Overall debt stress among Australians women (40.5) reported higher debt stress than men (36.7). The number of Australian women who missed a bill or loan payment reported was 25% compared with men at 19%

It’s been happening for years. Back in 2014, the Australian Psychological Society (APS) reported “personal financial issues” were a major source of stress for 53 per cent of women but only 44 per cent of men.

The APS found three main causes of stress amongst Australians (in order) were personal finance, family issues and personal health.

One explanation for women’s financial stress is historical and current pay inequity

In Australia, according to the Workplace Gender Pay Gap Statistics (WGEA), Australia’s national gender pay gap is 13.8% as at February 2022. The national gender pay gap is calculated by WGEA using data from the Australian Bureau of Statistics (ABS).

The current male average weekly ordinary full-time earnings is $1,846 compared to $1,591 for females.

This means that on average, women earned $255 less than men.

In the US, their 15 March 2022 Equal Pay Day highlighted 83 cents: that’s how much women in the US who work year-round are paid for every one dollar paid to men.

That’s 15 months. Or, if you look at a typical 9:00 – 5:00 workday, women start working for free at 2:40 p.m.  Over half a century after the US passed the Equal Pay Act, American women still face a substantial gender wage gap across the spectrum.

At the same time, women traditionally have had more responsibility for the day-to-day running of the home, such as domestic duties and childcare. In recent times though women’s involvement in financial decision-making – and sharing costs – in relationships has increased.

One could speculate shouldering more financial responsibility while still earning less and doing more than men at home might be a factor in women’s higher levels of financial stress. There is also evidence that risky behaviours with money, such as impulse spending, are linked to feelings of stress, guilt, boredom and anger.

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.

Seeking help around our finances and feelings of financial stress eventually becomes essential.

The help required will vary for individuals. It may be practical financial support, learning budgeting skills, increasing your financial literacy or seeking assistance to manage the stress of money worries.

One solution for some sufferers of financial stress is to become financially mindful.

Financial mindfulness, is an active process of paying attention to your finances, financial behaviours, attitudes, and beliefs around finances. It is keeping awareness of your thoughts, feelings, actions and financial environment in mind so that you can make better financial choices.

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How to deal with the financial stress from increased cost of living pressures

Australia is in the grips of cost-of-living crisis which poses a threat to the financial stability of many, with high levels of financial stress almost guaranteed for millions experiencing rising costs.

Escalating prices for fuel, groceries and rapidly climbing interest rates mean that the sustained historic period of low interest rates and slow price growth is officially over.

The Reserve Bank of Australia raised the cash rate by 50 bps to 0.85 per cent during its June 2022 meeting. This was the first back-to-back rate hike in 12 years.

Over the twelve months to the March 2022 quarter, the Consumer Price Index rose 5.1 per cent, the fastest rate of increase for 20 years in Australia.

It’s expected to climb higher still.

Fuel costs were up 11 per cent, housing up 6 per cent and groceries up 5.3 per cent.

Education costs and household services and equipment also spiked in the past year.

Reserve Bank of Australia governor Philip Lowe publicly said he expects the inflation rate to hit 7 per cent by the end of 2022.

At a household level, this macroeconomic data is merely confirmation of what we know from first-hand experience: our living costs have grown sharply.

The cost of living and financial stress

For many people, managing money can be stressful, but it becomes even more so when money is tight in a household.

“Fear, anxiety, and depression can all creep into a relationship with money when finances are tight,” said money educator Lea Clothier.

It can also cause conflict in relationships where couples are feeling stressed by their financial situation and unable to get on the same page with their finances or communicate about it.

Financial stress can affect people’s self-esteem, and their mental well-being, and cause insomnia, anxiety and depression.

“This will have an impact on someone’s health, overall well-being and ability to function in their day-to-day lives,” Ms Clothier said.

Financial stress is also a cause of lost productivity in the workplace.

There are several studies that show the lost number of days that people have due to financial stress and/or worrying about their finances.

The cost of living and financial well-being

Our ability to stick to savings goals and plans are major building blocks in our financial well-being.

Rising living costs, with expenses like groceries, petrol, rent, mortgages and other loan repayments, can cause financial stress and can detract from our savings goals and plans.

When costs increase, we have two main options – earn more money, or spend less.

Rising costs of living will ultimately result in people having less spare cash to save or make additional debt repayments.

Which costs do we need to be especially mindful about?

Energy and fuel are some of the biggest expenses for business and families.

Fuel costs impact on most people, either through what it costs you to fill your tank, to the cost of ride-sharing, cabs or distribution for businesses.

There’s a limit to how transport costs needed to run a business can be reduced.

But at a personal level we can trim costs by using low-cost travel options like public transport and by applying fuel discounts open to consumers.

Rising grocery and energy costs will flow through to increased entertainment costs – in places like restaurants and accommodation.

Unless we can absorb these increased costs, invariably this means cutting back on eating out and entertainment.

How budgeting helps

Budgeting is not a once off event, it is a continuous activity where you are revising and making changes to stay on budget.

‘When you start to fall outside the rails, sometimes because of increased costs, that is when you make the necessary changes before it becomes a problem,’ says FM founder Andrew Fleming.

Revising your budget is very important to keep your household spend manageable.

Your budget should be a ‘live’ document that takes into account your changing circumstances.

So, if your income changes, your budget should be altered. When your costs go up, you must adjust your budget to reflect this.

You can read more about why budgeting matters and how to budget in our previous blogs.

The main steps to budgeting as we have determined them are:

Step 1: Properly determine your household income;

Step 2: Begin tracking your living expenses;

Step 3: Balance your budget;

Step 4: Go back and review your expenses;

Step 5: Review your income potential; and

Step 6: Balance your budget again.

The weekly reality of staying on track requires that you maintain your budget – that is made up of separate set of actions. The basic steps are:

Step 1: Schedule your budgeting practice;

Step 2: Make budgeting a game that you win at;

Step 3: Review the value of your money and simplify your budgeting;

Step 4: Get smarter about your use of credit;

Step 5: Get real about planning;

Step 6: Experiment with ‘not spending’;

Step 7: Nominate a budget buddy and become accountable; and

Step 8: Become proactive – and stay positive.

Some budgeting tips for 2022

When living costs are increasing in most of our essential expenses it can be difficult to find areas to cut back in a budget.

It can be a good time to review budgets, cutting back on non-essentials (such as shopping, entertainment and dining out) and adopting a savvy mindset to see where you can make savings, for example using fuel discount vouchers, shopping in bulk, and being energy smart to save on electricity costs.

It’s important that people make their savings goals and additional debt repayments an expense item in their budgets, rather than just using what is left over for these.

Otherwise, people will often find that there is no spare money to contribute towards these priorities.

 What other spending should you be examining

“A key spend to keep close tabs on is your grocery shopping,” says Andrew Fleming, CEO of Financial Mindfulness.

“You need to avoid buying items you previously have always purchased and find a cheaper alternative. For example, I love iceberg lettuce for my salad but have stopped buying it at $5 and over.

“This item peaked at $12 at stores in some states. Before the recent price increases, it was $2.80 each.

‘My salads now lack the good old iceberg lettuce, but that is ok for now until prices come back. Review all of your shopping items with this mindset.”

It’s worth noting that in the age of consumer choice, the places we relied on to provide value for money are changing.

For instance, there has been coverage in the media lately about the prices of fresh produce in Australia.

Major supermarkets, for so long the paragon of low prices, are no longer guaranteed to offer the lowest prices – despite what their marketing says.

In many cases large suburban greengrocers have enough buying power and discretionary pricing to offer much lower prices on most lines of fresh produce.

Go and do your own research.

Health costs are starting to increase too – though you may be wise to accept these costs with a view to your future.

But we can certainly examine health costs, just as we can examine all costs.

‘These can be as little as the odd extra doctor’s appointment, to mental health plans and the visits to counsellors or psychologists, loss of income due to excessive time off work and lost deposits for holidays that have to be cancelled last minute,’ says Hamish Ferguson, of Financial Mindfulness.

Mr Fleming says review of all your credit products is a good idea to ensure you are not paying too much in fees.

‘If you are paying interest on your credit card, you are really at a disadvantage with the current average credit card rate charging at 19 per cent per annum.

‘Some banks are offering no interest for up to 25 months (including the balance transfer) with a zero per cent purchase offer credit card, that is a big win to help with the cost-of-living pressure.’

How mindful spending can help

Many of our habits with money are automatic, meaning that we’re often managing money in a mind-less way.

‘Financial mindfulness is the act of bringing awareness to the way we interact with our money,’ says Ms Clothier.

‘It’s about paying attention to what is happening in the present moment with your finances.

Stress is often heightened when we project into the future, so keeping our focus on the here and now can help to make finances easier to manage.

That includes becoming stressed about our finances and predicting a catastrophic outcome without discussing options – for instance housing or business repayments.

Financial stress of this type can be so overwhelming that we turn to dysfunctional and unhealthy coping strategies such as gambling or over drinking.

‘It’s about paying attention to and managing your day-to-day spending, tracking your spending, and being mindful in your shopping and spending decisions.’

An element of this is mindful-shopping: be curious about prices, your real needs and aware of both sides of the consumer-retailer relationship.

Ultimately the main point of almost messages about shopping is to encourage you to increase or at least maintain your spending.

“Marketing tactics such as one time only sales offerings, promotions and discounts are all designed to get us to spend big,” says Ms Clothier.

“Tactics such as the use of time, or volume-based limitations and ‘buy now or miss out’ messages create a sense of scarcity and trigger a fear of missing out (FOMO).”

Creating a perception of scarcity is a successful way of making goods and services seem more appealing. Big companies spend millions unlocking the psychology of shoppers, because doing so is worth billions.

Generally, red flags include words, phrases and images such as:

    • for a limited time only;
    • 24-hour sale;
    • hurry;
    • don’t miss out; and
    • any symbol suggesting a countdown, such as a clock.
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Keeping up with the Joneses

In a recent article on how renters can avoid fear of financial failure we referred to the pressure people feel to stray into unhealthy spending patterns out of the type of peer pressure known as ‘keeping up with the Joneses’.

“You can avoid the mindset traps by not thinking that you have to ‘keep up with the Joneses’ and realise that often the picture people show is not the real or true picture,” said Hamish Ferguson, a director of Vision Property and Finance.

First, a quick refresher on what the saying means.

Keeping up with the Joneses is a common saying referring to the comparison to one’s neighbours as a benchmark for the accumulation of material goods or status.

To fail to “keep up with the Joneses” is perceived as demonstrating financial and/or cultural inferiority.

It comes from an American cartoon strip of the same name which started over a century ago.

Most of us like to think we are independently-minded enough to avoid falling into traps like this.

But as with the belief that most of us see ourselves as “above average” drivers, we tend to overstate our abilities.

As a result, we can easily avoid helpful behaviours like budgeting and slip into mindless spending and financial stress.

New research by Finder shows it’s that’s not the case that most of us avoid the ‘keeping up with the Joneses’ trap.

A national survey of 1,000 people found 47% of Aussies have felt pressured to spend money by their social circle.

The research found 1 in 5 (22 per cent) accumulated debt or spent more than they could afford because of the pressure to spend – equivalent to 4.3 million Australians.

Aussies feel peer pressured into anything from splitting bills to buying property.

More than a quarter of Aussies (28 per cent) have felt forced into splitting a restaurant bill evenly, when they had ordered less food than others.

The gender split on this ‘keeping up with the Joneses’ behaviour may not automatically confirm stereotypes.

The research showed men ($1,560) have overspent substantially more than women ($912) to keep up with friends and family.

Finder’s Katie Browne attributes some of how we handle peer pressure around money to the fact that it remains a taboo subject.

“Unfortunately money can cause rifts between friends and families at times,” she said.

“Everyone has different incomes, money values, and financial priorities and finding the spending sweet spot with friends can be a tricky situation to navigate.”

The research showed 1 in 7 (14 per cent) people have been coerced into going on an expensive holiday with loved ones.

A further 9 per cent have felt they had to fund a bucks or hens night, while 7 per cent have felt pressured into paying for someone else’s baby shower.

Some Australians even admit to buying expensive items like a nice car (8 per cent), a home (8 per cent) or designer items (8 per cent) to keep up with their friends and family.

Browne said feeling guilted into spending more just to keep up with friends is an easy way to blow your budget.

“While no-one wants to be a party pooper, consider suggesting a more affordable alternative when you are invited to a fancy dinner or on a pricey holiday. You can always be honest with your loved ones and say while you value spending time with them, you don’t want to spend too much money doing it.

“Money management apps – like the Finder app – can help you see your income and expenses all in one place and figure out how much you can afford to spend.

“At the end of the day, it’s your money and you get to decide how you spend it. If your friends are good friends they’ll want to see and spend time with you – and the location really shouldn’t matter.”

Millennials are the most vulnerable to financial peer pressure, with 69% having spent money because of social influence, and 36% admitting they’ve gone beyond their financial limits to do so.

Kate Browne, personal finance expert Finder, said money is still a taboo topic for many.

“Unfortunately money can cause rifts between friends and families at times.

“Everyone has different incomes, money values, and financial priorities and finding the spending sweet spot with friends can be a tricky situation to navigate.”

The research shows 1 in 7 (14%) people have been coerced into going on an expensive holiday with loved ones.

A further 9% have felt they had to fund a bucks or hens night, while 7% have felt pressured into paying for someone else’s baby shower.

Some Australians even admit to buying expensive items like a nice car (8%), a home (8%) or designer items (8%) to keep up with their friends and family.

Browne said feeling guilted into spending more just to keep up with friends is an easy way to blow your budget.

“While no-one wants to be a party pooper, consider suggesting a more affordable alternative when you are invited to a fancy dinner or on a pricey holiday. You can always be honest with your loved ones and say while you value spending time with them, you don’t want to spend too much money doing it.

“Money management apps – like the Finder app – can help you see your income and expenses all in one place and figure out how much you can afford to spend.

“At the end of the day, it’s your money and you get to decide how you spend it. If your friends are good friends they’ll want to see and spend time with you – and the location really shouldn’t matter.”

Millennials are the most vulnerable to financial peer pressure, with 69% having spent money because of social influence, and 36% admitting they’ve gone beyond their financial limits to do so.

Have you ever felt pressured to do any of the following with friends/family?
Split a bill evenly at a restaurant when you ordered less

28%
Go on an expensive holiday

14%
Buy concert/festival/sporting event tickets

10%
Pay for someone’s bucks/hens night

9%
Buy a house/apartment

8%
Buy a nice car

8%
Buy designer items

8%
Pay for someone’s baby shower

7%
Other

1%
None of the above

53%
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What renters can practically do to improve their finances

In the first part of this series, we examined the mindset problem that can plague renters: fear of financial failure that comes with not owning your own home.

It’s well accepted that renting rather than owning your home is regarded as a sign of financial struggle, even if it’s not true.

That perception can act as a deterrent to creating financial freedom let alone becoming financially independent.

You can read our suggestions for overcoming that mindset in the first part of this series here.

That is an important first step towards overcoming the perceived hurdle of renting in achieving financial freedom.

A foundation of financial freedom

Being able to save more than we spend is a common-sense foundation in finding financial freedom and it should never be ignored.

A renter’s belief that their rent payments make savings impossible is extremely damaging to this fundamental step.

The reality is that a renter should – so long as they are paying an appropriate level of rent – have the ability to increase savings beyond that of a homeowner.

A homeowner has to pay rates, insurance and factor in repairs and maintenance.

Also, a mortgage will often be higher than rent from a repayment point of view.

“The renter should be trying to get into the mindset that this cashflow difference or saving for them should be put away for savings,” says Hamish Ferguson, a director of Vision Property and Finance.

A basic example is that an $800,000 established home that is more than 10 years old could have up to $8,000 per annum needing to be allowed for in expenses and possibly another $4,000 per year in the difference between rent and mortgage repayments.

That is $1,000 per month that the average renter could put towards savings or some sort of investment, he argues.

Paying the right amount of rent

So long as a renter’s rent payments are set at an accurate level of their income they should have more freedom to grow personal wealth in a way that they may not actually recognise or realize.

What if your rent actually doesn’t allow you to save?

The widely-accepted guideline is the 30 per cent rule, which recommends that you don’t more than 30 per cent of your gross income on renting a home.

It’s not an exact guideline and in an expensive capital city, it can be hard to stick to. But you shouldn’t be way over that. If you’re spending 40 per cent or more of your gross income on rent, you may be renting beyond your means.

That means if you earn $1,500 a week before tax, you’d be unwise to pay much more than $450 rent per week. Doing this is called placing yourself in ‘rental stress’.

This brings up another huge advantage of renting over home ownership: the ability to move somewhere cheaper quickly.

If a renter falls on hard times or realises they are paying too much rent, they can move to a lower cost property. It is much more challenging for a home owner to do this.

Renters sometimes have more freedom to negotiate in a contract than they realise too.

“Depending on the market it is possible to negotiate if rents are falling,” Mr Ferguson says.

“As home ownership in Australia is slowly declining and the government is conscious of reducing the benefits for property investors, this is not that common.”

What is more common, he says, is if the renter is thinking of moving due to cost increases they can:

    1. sign longer-term leases to try and reduce the effect of rental increases
    2. if they look after the property well, the owner is less likely to want to lose the tenant. This increases their bargaining power
    3. Sometimes for small increases or if they are a good tenant they can encourage the landlord to improve the property. This might mean getting an air conditioner, putting in a new oven or dishwasher or other small improvements.

Those small wins earned from being a reliable tenant can be translated into financial benefits.

Another thing renters can do to save money is legally sub-let a room.

They are allowed to do this however they do need to seek permission from the landlord. Most leases will specify how many people will be occupying the property.

What else can a renter do to improve their financial position? 

There has always been active debate around home ownership and whether the renter can achieve the same position as a homeowner.

If the same level of discipline is held between a homeowner and renter, the same level of wealth can be achieved if the income levels are the same.

Often but not always, it is harder for the renter as it is hard to create the right level of discipline around their finances so that the right level of money is put away for long term investing.

Here are some other ideas to help renters save money and improve their financial position:

    • Improve your financial literacy;
    • Face your debts and start reducing them;
    • Have good regular habits with regular bills, i.e. set aside money for bills (i.e. car registration, pet bills) and ‘unexpected’ expenses;
    • Do a budget and maintain it;
    • Introduce some realistic financial goals;
    • Introduce a mindful approach to managing your money;
    • Address and/or eliminate damaging financial behaviours such as compulsive spending and gambling;
    • Reduce discretionary spending i.e. eating out;
    • Cut energy costs i.e. ditch the second fridge, heat/cool one room at a time, dry clothes outside instead of using a dryer;
    • Live close to work to save money on transport;
    • Sell unwanted items;
    • Pay your rent on time – having a good relationship with your landlord is worth money; and
    • Have a plan for investing
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How renters can avoid fear of financial failure

Whether or not it’s always true, renting your home rather than owning it is seen as a marker of financial struggle in Australia.

Likewise, home ownership is widely regarded as an indicator of financial independence – or at least a step towards it.

If someone owns their home, either alone or as part of a couple or group investment, there is a perception of personal wealth versus the relative lower net worth of a renter.

Of course, it’s not always true. People have many different reasons for renting – often because they are only in a town temporarily.

But for those living permanently in a town, renting – especially in some parts of a city – is associated with a lower socio-economic position and financial stress.

“Unlike some of our European counterparts, Aussies have always had this desire to own their own piece of turf. I think there is a stigma if you don’t own your own home,” says Hamish Ferguson, Newcastle Director of Vision Property and Finance.

This is arguably especially even truer in Australia’s big cities than its regional areas – where property values and price growth are usually much lower than in big towns and cities, often based on demand.

It’s a painful reality for renters that the median Sydney house price increased by $1,100 a day in 2021 – dramatically more than most could hope to save.

Overall Sydney median house prices grew an astonishing 33 per cent in the previous 12 months to $1.6 million.

In Canberra, median house price growth was even higher at 36.6 per cent (to $1.18 million), in Adelaide, it was 27.5 per cent (to $731.547) and it was 25.7 per cent in Brisbane (up to $792,065). In Melbourne, prices grew 18.6 per cent (to $1.1 million).

This of course has a positive impact on home owners’ financial positions.

Their investments look safe and savvy and in a powerful practical reality, they can borrow against their increased equity to purchase more property or capitalise on what they already have.

So long as property prices do not tumble many homeowners’ financial futures look reasonably assured.

But what impact does price growth have on renters, apart from making owning homes look more and more out of reach in capital cities?

Can renters get caught up in negative belief systems and perceptions of a two-tiered system extending to financial instability.

Can and do they begin to ‘give up’ on financial independence because of this?

For many, the answer would be a resounding ‘yes’.

How to avoid the mindset traps around home ownership

The polar opposite perception of financial independence is financial struggle, which is provocative and emotive.

There’s little wonder that positive and negative mindsets come with these positions – whether they are totally true, partly true or just perceived.

“Often people place the stigma of not owning a home on themselves,” notes Mr Ferguson.

He says the first mindset trap to avoid is that if I owned a home “it would solve all my problems”.

This belief is simplistic.

Owning a home is a huge commitment, often a lifelong one and it doesn’t guarantee financial success when you sign a contract.

In fact, any big contract that involves large sums of money requiring a long-term commitment to make repayments is inherently a financial risk.

You need to be well prepared to enter such a contract and have contingency plans in case your personal situation changes.

So, what can renters do about the negative mindset they might fall into?

Is it possible to avoid self-defeating patterns that might ingrain financial difficulties just because you’re a renter?

The reality is if someone is not really ready to buy that renting – within your means and with a savings goal – is by far a better option than scrambling to buy a home and that could instantly put you into mortgage stress.

Mortgage stress is most commonly defined as a household spending more than 30 per cent of your pre-tax income on home loan repayments.

“You can avoid the mindset traps by not thinking that you have to ‘keep up with the Joneses’ and realise that often the picture people show is not the real or true picture,” Mr Ferguson says.

Mindsets that tell us either home ownership is straightforward, or that it is out of reach, are unhelpful. Both are types of ‘black and white thinking’ that can lock us out of seeing other possibilities.

Getting into financial reality to overcome black and white thinking

We need to be in reality about our financial position and what’s involved with all the steps towards buying a home – and alternative investment options.

An absolutely vital first step is to learn how to monitor and measure your own wealth, ongoing financial position, and get advice around this.

Do you have a clear idea not just of your current income versus expenditure, but of how this might change in the next 5-10 years?

Factors influencing this include:

    • Your health and that of loved ones;
    • Whether your employment is stable;
    • The likelihood of increasing or losing income;
    • Having a family, schooling; and
    • The stability of your other financial commitments, i.e. business ownership.

“A good example is if someone comes to me wanting to purchase a property but I tell them they are up to two years away from doing this,” Mr Ferguson says.

“The hard decision is to either work towards this for two years or ask what else can be done.

“Often people give up as the goal is too far away and it is too hard to break a big goal up into smaller goals.”

The real benefits of renting

Can renting be a good thing, can it have positive outcomes financially?

Absolutely yes it can – provided renters maintain discipline around their personal finances.

“Home ownership is often only good because it forces people to pay down the loan and create equity,” Mr Ferguson says.

“If you don’t choose property then it is important to psychologically apply the same level of discipline to putting money away.”

This is hard to do in today’s society where immediate gratification and appearing successful on the outside seem too important and prevalent.

The benefits of renting include:

    • More freedom to travel the country and the world;
    • Less of a financial commitment, especially upfront;
    • No maintenance costs or repair bills;
    • No property taxes;
    • Greater ability to reduce living costs if your situation changes; and
    • You are likely to have more disposable income.

It’s worth noting that there are downsides to home ownership too. Remember the point about ‘keeping up with the Joneses’. That clichés has survived so long because it’s true.

These include:

    • Huge upfront costs and high-pressure transactions;
    • High costs of maintenance, many of which are ‘hidden’;
    • Mortgage stress is a constant pressure;
    • Chaos caused by defaulting on mortgage; and
    • Relationship breakup can mean you lose a house anyway.

How renters can still work towards financial independence without owning a home

​Once you let go of the mindset that you’ll be a failure if you don’t own your property, you make room for other investment options and choices.

An exchange-traded fund (ETF), managed funds including shares are seen as a successful alternative by many experts.

Vanguard Index Report said shares averaged 9.31% in gross returns each year in a 10-year period to June 2021 in Australia. This makes it the second-highest-returning Australian asset behind residential property.

Around $2,000 is enough to get started with a share portfolio, but you shouldn’t expect returns for around five years.

There is no need to borrow to get going and in a crisis,  you can remove your investment in a matter of days.

They can start a managed fund or shares portfolio or they can purchase their first property in a lower priced area and rent it out as two examples.

A renter can also focus their savings on some sort of small business or side hustle to create a better income stream

It all starts with budgeting and recognising your own negative mindset so you can become more open to other investment options.

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Facing debt hangovers

The first few weeks of the New Year is one of the best times of the year in Australia.

The weather is great, the pace of life has slowed down and most of us get to holiday and spend more time with our families.

Coming into February we are easing back into work and into reality.

One of the realities we invariably have to face is repaying debts accumulated in the preceding weeks.

Many of us started accumulating extra debts from mid-November (with Black Friday and Cyber Monday sales) through Christmas, right up to mid-January – including the expenses of sending kids back to school.

This is debt run up on our credit cards, store cards, Afterpay (or equivalent Buy Now Pay Later products) account or even sometimes from short-term loans. The piper always needs to be paid, as the old saying goes.

“The reality of holidays is over, kids go back to school. Credit card and BNPL statements have started to roll in and you could be counting the cost,” says Andrew Fleming, founder of Financial Mindfulness.

A pattern of being in debt often creates financial stress.

Is debt always bad?

“While a limited amount of debt isn’t necessarily bad,” says Lea Clothier, a behavioural money coach in her Creating a mindful Relationship with money course,” an excessive amount can often delay us from reaching our goals.”

Not all debt is created equal and by that, we mean that some debts are better than others.

“Debt used to purchase an asset that produces an income or will increase in value is better than the debt we have for things that won’t increase in value,” she says.

The latter is referred to as consumer debt and we often use it to buy household items, clothing, holidays and other expenses.

A great investment that we can actually make is paying off the interest on our debt. Repaying the debt will free up our cash flow and provide us with a return that is likely to be higher than other investments.

The problem occurs when we begin to accumulate multiple debts and ignore the red flags around those.

“Think of debt like putting on weight,” she says.

“If we gain a few extra kilos we can decide to eat less and exercise more and we can generally lose the weight without too much problem.

“But if we wait until we’ve gained 20 kilos, it’s going to take a lot more effort and a longer time to lose the weight. Comparably, if we get into trouble with our debt and spending habits, we can often get back into financial shape just by deciding to spend less and not use our card as much, or at all.

“But if we wait until we’re struggling with debt and owe a large amount, then it’s going to take us longer to repay, cost us more and we may have fewer solutions available to us to fix the situation we’re in.

It is important to note that if a debt problem is ignored, or swept under the rug, financial stress can become acute or chronic – or both.

Once we get into reality and face our debt hangover – and hopefully avert a debt crisis – we can begin to work out how to prevent debt hangovers from recurring.

We do this by planning and setting some clear goals around debts.

How do you know if debt might be a problem in your life?

If we are not actually confronted by a sheriff or debt collector, it’s easy to think we are avoiding the debt problems because they don’t feel urgent – until the crisis hits.

Meanwhile, things could be happening in the background that will have very serious consequences for you – such as a bankruptcy process beginning or a bad credit rating being earned.

Many of us aren’t aware that each time we apply for a new loan, finance at a department store or even sign up for a contract for a mobile phone, rental property, electricity or gas then it’s likely that it will be recorded on our credit report, Ms Clothier says.”

“When we borrow money, a lender looks at information about our credit experiences to decide whether to lend us money. Our bill-paying history and the number and types of accounts we have, whether we are late paying bills or making payments, how much we have in total debt are all considered.”

Here are the signs that you need to face reality with your debts:

    • If you are avoiding looking at your debts (i.e. not opening bills/reminder emails);
    • If you don’t know how much you owe;
    • If you are struggling to make ends meet;
    • If you are using debt to pay off debt (i.e. using cards to pay off other debt);
    • You regularly incur late fees;
    • If you are hiding debt levels from your partner or loved ones;
    • If the thought of debt is keeping you up at night;
    • If the thought of debt is you causing stress during waking hours and affecting your concentration;
    • If you feel like you are stuck on a treadmill of repayments and can never get ahead;
    • You regularly take on more debt with a nagging feeling you aren’t on top of the debt you already have; and
    • You are a reputation amongst family and friends of owing people money.

As you read over those red flags, it should begin to occur how much effort is expended in avoiding debt problems.

You deserve some peace from always feeling under attack from debt and repayments.

The first steps to facing the reality of your debt

It’s important not to shirk the hard work laid out here, so be prepared to get into action.

Firstly, write down everything that you owe. Get clear on the amount owing, the repayments, the interest rate, the frequency, and the number of payments left.

Use a planner to do this, marking down the amounts and dates so you can clearly see how one affects another. Make sure you understand the totals.

“Allocate your income, after living costs to debt repayments. The difference is the hole you need to attack,” says Mr Fleming. Review your budget and see how you can prioritise paying off debt, then review your spending habits too.

Do you have a budget? If not, learning how to budget is an essential step.

You should make a note right here and do some background work on budgeting and how to maintain a budget as soon as possible.

Consider what has caused the debt. Was it some kind of regular but non-essential spending?

Can you make changes to your shopping and spending habits? If the thought of this is very difficult, it might be time to work with a coach or support person to upskill yourself in your financial education and skills.

Are there things that you can cut back on, or redirect money towards the debt temporarily to help you get back on track?

Can you sell any unwanted or unused items to free up cashflow?

Can you consolidate your higher-interest debt to a lower interest alternative?

If you have a home loan you might be able to roll personal or credit card debt into it or do a balance transfer.

But be sure to cut up the credit or store cards so you’re not tempted to reuse them.

Changing your thinking around debt

Let go of any shame. We tend to carry guilt and shame with debt. But these emotions don’t help us in getting out of the situation.

No really, releasing shame is vital here. If you don’t know how to do this, it’s based on forgiving yourself and taking positive actions to build confidence.

It’s important to understand the ‘action’ part of the way out of debt problems. You took some unhelpful actions to get into debt, now you must take useful and helpful corrective actions.

Having honest conversations is one such incredibly important action.

If you’re struggling to pay – it’s really important that you speak with your creditors.

The paying bills module of the Financial Mindfulness app has some really good tips on how to manage this!

The worst thing we can do is ignore debt. Burying our heads in the sand isn’t going to make the problem go away.

There are many options if we discuss it with others to come up with a solution.

“Remember a problem shared is a problem halved,” Ms Clothier says.

Speak with your creditors, they want to support you and can help you come to an arrangement about making repayments that you can afford.

Two approaches to confronting debt

Getting your strategy right – or at least having a strategy – is usually essential to effectively confronting a problem.

Here are two ways that we can approach paying off multiple debts.

“We continue to make minimum repayments on all debts but with any surplus income we have we can focus on either a head vs. heart approach,” Ms Clothier says.

The logical approach – the ‘head’ approach – directs us to pay off the debt that has the highest interest rate first, she says.

This is the logical way to do it as this debt is costing more to repay.

The ‘heart’ approach, Ms Clothier says, prioritises the idea of making small wins first.

This says that paying off the debt with the smallest amount owing first will be the quickest for us to achieve an important accomplishment.

Paying out the smallest debt first will help us get started and once repaid it helps to free up more cash flow towards paying our other larger debts.

‘It doesn’t matter what option you chose as both options work,’ she says.

There is no one solution to dealing with debt – you will come across many different strategies and suggestions.

But the one solid gold rule with debt is this: stop ignoring it and start facing it.

 

 

 

 

 

 

 

 

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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?’

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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.