Posted on

New clinical help on the horizon for shopalcoholics

New clinical help on the horizon for shopalcoholics

New clinical help on the horizon for shopalcoholics.

We all instinctively know that compulsive, mindless spending can be a problem.

We see it in those around us and even in ourselves at times – especially when stress drives the perceived need to ‘escape’ mentally.

Whatever is behind compulsive shopping, buying, spending, even shopalcoholism – whatever we call it – it can and does result in unnecessary financial stress and even distress if the behaviour goes on uninterrupted.

Financial stress is a condition that can respond positively to a mindfulness program, especially when coupled with other interventions, such as improved goal-setting, financial literacy, and behavioural tools.

These combined can help sufferers produce a preferred state of financial mindfulness.

But not many people realise compulsive shopping has also been described in clinical settings since the early 20th century – more than 100 years.

Despite this, until now there has been no officially recognised diagnosis for the disorder.

That seems surprising how commonplace it appears to be, and how it is widely accepted as growing and as a contributor to issues like personal debt and overconsumption at personal and even macro levels.

Now science has moved a step closer to being able to help people with this behaviour – which is finally being recognised as a condition to be treated.

Flinders University reports that for the first time, world experts in psychology have built a framework to diagnose Compulsive Buying-Shopping Disorder.

This means there could be new pathways for help for people struggling to manage their spending behaviour and mental wellbeing.

The framework, published in the internationally recognised Journal of Behavioral Addictions, confirms that compulsive over-spending can be regarded as a disorder.

The news gives researchers and clinicians tools to design targeted interventions for this potentially devastating condition.

The new guidelines, published in the Journal of Behavioral Addictions, confirm that excessive buying and shopping can be so serious as to constitute a disorder, giving researchers and clinicians new powers to develop more targeted interventions for this debilitating condition.

Evidence-based criteria for Compulsive Buying-Shopping Disorder (CBSD) will be developed by an international team, including Professor Mike Kyrios from Flinders University’s Órama Institute for Mental Health and Wellbeing and Professor Astrid Müller from the Hannover Medical School in Germany.

A study of 138 researchers and clinicians from 35 countries has begun the work.

The research was a collaboration with researchers from the Hannover Medical School at the University of Duisburg-Essen and University of Dresden in Germany funded by the German Academic Exchange Service and Universities Australia.

Professor Kyrios described the new work as a “game-changer” for research into the issue, which could underpin the development of much-needed treatments and improved diagnostic processes to follow.

“In over 20 years, since I started investigating excessive buying, there has been an absence of commonly agreed diagnostic criteria which has hampered the perceived seriousness of the problem, as well as research efforts and consequently the development of evidence-based treatments,” Professor Kyrios said.

Evidence-based treatments should now be possible with agreement on diagnostic criteria.

New diagnostic criteria include the recognition of “excessive purchasing of items without utilising them for their intended purposes”.

In the context of the criteria, excessiveness is described as “diminished control over buying/shopping”.

Another feature of the disorder is that “buying/shopping is used to regulate internal states, e.g., generating positive emotions or relieving negative mood”.

“Clients who show excessive buying behaviour commonly have difficulties in regulating their emotions, so buying or shopping is then used to feel better. Paradoxically, if someone with Compulsive Buying-Shopping Disorder goes on a shopping trip, this will briefly improve their negative feelings, but will soon lead to strong feelings of shame, guilt and embarrassment.”

The Delphi research method was used to reach a consensus from the researchers and clinicians involved in a complex psychological disorder.

“The Delphi technique is an ideal method to integrate diverse perspectives from international and interdisciplinary experts in the field of Compulsive Buying-Shopping Disorder,” says co-investigator Dr. Dan Fassnacht, Senior Lecturer in Psychology at Flinders University.

“This helped us to developed diagnostic criteria featuring large agreement among experts in the field, and is an important milestone to better understand and treat this behaviour.”

Dr. Kathina Ali, Research Fellow at Flinders University and co-investigator of the study adds: “Previously, it was difficult to compare studies without agreed criteria.”

“Now for the first time, we can start examining Compulsive Buying-Shopping Disorder more precisely which should help us improve our treatments for this disabling condition.”

Posted on

Key insights from the FSI report

Key insights from the FSI report

Key insights from the FSI report.

A significant focus of Financial Mindfulness is the tracking and reporting of our Financial Stress Index (FSI), which allows us to benchmark and compare the impact of financial stress on Australians. The FSI has now become a leading financial stress measure in Australia.

The FSI is a comprehensive measure of the financial factors and biopsychosocial consequences of financial stress.

It is evidence-based and was researched and developed by neuropsychologists and financial experts to better understand how financial stress impacts individual wellbeing.

March 2021 marked the release of FSI data collected from the period August 2020 to February 2021 – overlapping with the extension of one of the Australian Government’s key pandemic supports, JobKeeper.

Financial Mindfulness believes the March 2021 FSI revealed significant insights about the impacts of financial stress especially when mapped against the findings from the previous six months – the early months of the Coronavirus pandemic, February to August 2020.

When Financial Mindfulness prepared the latest FSI report and provided key media outlets with the findings, those outlets reported news that reflected our key findings.

Those were:

  • 10.75x increase in people who are thriving and not experiencing financial stress.
  • 9.75x increase in those experiencing financial distressed during COVID19 times from pre-COVID19.
  • Of those who are financially stressed, a large proportion feel worried (86%), overwhelmed (72%), and downhearted (75%) about their financial situation.
  • 66% of people note financial stress has negatively impacted their relationships
  • 59% experienced conflict with loved ones.

“Uncertainty was a universal experience during the early stages of Covid,” said Financial Mindfulness CEO and Founder Andrew Fleming.

“Unfortunately, a lot of us humans have a habit of thinking the worst when faced with uncertainty.”

“Our data shows the first three months of COVID-19 saw a big upswing in people worried about their finances, many of whom became downhearted and overwhelmed about their finances.”

The Government stepped in and provided extensive financial support, employers set up ‘work from home’ arrangements that allowed businesses to stay afloat, and there was a realisation that the sky would not fall in.

FSI data comparing the six months to the end of February 2021 with the previous six months showed confidence returned.

“The bounce was significant, a lot of people started to experience less financial stress and identified as ’thriving’.”

“Money was saved due to lockdown measures and that drove an increase in personal savings.”

In an online article headlined More people say they are thriving financially than before Covid-19, influential news outlet The Australian, reported the key finding that ‘the level of those who considered themselves as financially thriving was 18.8 per cent, which crashed to 2.4 per cent during the first six months of the pandemic.’

The website, Money Management, also reported the same key finding in an online article titled Australians rebounding from pandemic.

The Australian also ran the article in its print edition, headlined More Thriving Financially but Those in Distress on Rise.

This headline reflected the other end of the financial stress spectrum – and showed that the numbers of people in financial distress have continued to rise since we first began measuring financial stress.

FSI data showed an increase in dysfunctional behaviours such as drinking, eating and smoking more.

People under financial stress and distress became aggressive to others, became distracted and started to ignore their financial situation.

People became agitated, felt tension, had trouble winding down and sleeping.

This was picked up by one of the most-read and popular news outlets in Australia, The Daily Mail in its online article headlined Revealed: The staggering number of Australians with less than $2000 in the bank – and why the slow Covid vaccination rollout could leave them financially ruined.

The article noted ‘Money wellbeing app Financial Mindfulness surveyed 645 Australians and found 34 per cent of them would be unable to raise $2,000 to cover a financial emergency.’

The Daily Mail also noted that aspect of the FSI was a ‘barometer of economic health’ in Australia.

“Ultimately we were not surprised about the financial fear everyone experienced during the initial impact of COVID and lockdowns,” Mr Fleming said.

“But we were very surprised about the extent of the bounce back, with so many people feeling financially confident.”

“We were also surprised and disappointed about the significant increase in people experiencing financial distress despite the bounce back, they are being left behind.”

Recently Financial Mindfulness has also been active in promoting mindfulness as a tool to help people manage their financial stress.

This concept was discussed in an article published by the website Financy recently, titled Using mindfulness to overcome financial stress.

The article was based on an exclusive interview with Dr Ellen Langer, secured by Financial Mindfulness.

That interview also produced blogs for this website, which you can read in two parts. The first part is here and the conclusion is here.

We believe mindfulness can be part of a solution to achieve a positive way of living where people maintain awareness and pay attention to their finances and financial behaviours.

We call that way of living financial mindfulness.

Financial Mindfulness recognises JobKeeper came to an end on March 28 and we look forward to finding out how this change affects people’s financial wellbeing in the next FSI reporting – which will be available at the start of August 2021.

Stay tuned and contact us if you would like to be updated and participate in our FSI work.

 

 

Posted on

Australians rebounding from pandemic

money management logo

Australians rebounding from pandemic

Financial Mindfulness was reported in Money Management on its latest financial stress survey.

Australians assessed as “thriving” financially have rebounded after sliding backwards during the first six months of the COVID-19 pandemic, according to Financial Mindfulness.

The firm’s Financial Stress Index (FSI) showed that 25.8% of 645 respondents were rated as “thriving”, a proportion that was 18.8% pre-COVID, but crashed 2.4% during the first six months of 2020.

The research had also found an almost 10 times increase in those that experienced finance distress due to COVID-19, while 64% of people experienced financial shame.

Andrew Fleming, Financial Mindfulness chief executive and founder, said Government support likely stopped financial stress from spiralling as people became uncertain about their financial position during the pandemic.

“When people stopped going out, their personal savings increased and at the same time interest rates were adjusted to their lowest levels in history,” Fleming said.

“The combination of extra savings and cheap money fuelled a personal and Australia-wide economic bounce back. This is reflected in the FSI data collected at February 2021.

“This ‘bounce-back’ is evidenced in falling unemployment, gross domestic product (GDP) levels increasing and another property boom.”

The proportion of respondents that were “managing” fell from 41.5% in the first six months of the pandemic to 26.1% in the six months from September 2020 to the end of February 2021.

A smaller number of people in chronic financial stress, categorised as “distressed” continued to increase throughout the pandemic, with financial and psychological factors the main drivers.

Those who identified as excessively eating, drinking, smoking due to their financial situation returned to pre-COVID levels.

On average 16% of people often had physical stress relating to their money worries and 71% were distracted because of financial concerns.

Agitation was the most common somatic symptom of financial stress (71%), followed by tension (69%) and inability to “wind down” (65%).

Many took an “ignorance is bliss” approach, either ignoring the situation (57%) or recklessly spending (57%).

66% of people note financial stress had negatively impacted their relationships and 59% experienced conflict with loved ones.

“While it is clear that some people have bounced back, there are many Australians who unfortunately continue to experience considerable financial stress,” Dr Nicola Gates, Financial Mindfulness consultant clinical neuropsychologist said.

“Inequity is increasing in Australia, and increasing inequality is associated with increases in financial distress.”

Published in Money Management on 6 April 2021. Credit: Chris Dastoor

Posted on

Staggering number of Australians with less than $2000 in the bank

Daily Mail Australia Logo

Staggering number of Australians with less than $2000 in the bank.

Financial Mindfulness was interviewed by the Daily Mail on the latest study on financial stress. These results show just how dire circumstances are for some Australian’s.

Revealed: The staggering number of Australians with less than $2000 in the bank – and why the slow Covid vaccination rollout could leave them financially ruined.

Financial Mindfulness study showed 34 per cent of people couldn’t raise $2,000 Almost half or 45 per cent of Australians can’t pay their weekly household bills Financial Mindfulness chief Andrew Fleming: those with low savings were at risk

Government and employers calling for halt to major minimum wage increases

A surprising number of Australians would struggle to raise $2,000 for a hot water, car or medical emergency and a slow Covid vaccine rollout could make that worse.

Australia’s eight-year run of weak wages growth is set to continue with both the federal government and employer groups calling on the industrial empire to withhold pay increases, despite the strong economic recovery from the Covid recession.

Money wellbeing app Financial Mindfulness surveyed 645 Australians and found 34 per cent of them would be unable to raise $2,000 to cover a financial emergency.

Almost half, or 45 per cent, could not meet their weekly household bills, the barometer of economic health taken in February 2021 found.

A surprising number of Australians would struggle to raise $2,000 for a hot water, car or medical emergency and a slow Covid vaccine rollout could make that worse. Pictured is a stock image

Financial Mindfulness chief executive Andrew Fleming said people with less than $2,000 in bank savings were particularly at risk.

A medical expense or a hot water system blowing up or a car breaking down: an expected expense hits people for six,’ he told Daily Mail Australia.

‘A lot of people are living week to week.’

Consumers already struggling with a mortgage, rent or credit card bills are increasingly turning to buy now, pay later apps, like Afterpay or ZipCo, or pay on demand, where individuals pay $80 a month to get $2,000 in the bank before their employer pays them.

Mr. Fleming said many Australians were unaware of the penalties they faced if they were late with repayments during a personal financial emergency.

‘For those who can’t raise $2,000 for an unexpected expense in the last month, there’s a high probability they’re going to resort to these new products – does the user really understand what they’re doing?,’ he said.

The past year has been very volatile, with the Covid shutdowns causing a 7 per cent plunge in gross domestic product, the steepest downturn since the 1930s Great Depression.

But the final six months of 2020 saw a 6.5 per cent surge in economic growth, the fastest-ever half-yearly pace of GDP expansion.

Despite that, the federal government is calling on the Fair Work Commission to refrain from giving Australia’s 2.2 million low-paid workers a substantial pay rise on July 1.

Fair Work Commission
The federal government is calling on the Fair Work Commission to refrain from giving Australia’s 2.2million low-paid workers a substantial pay rise on July 1. Pictured is a cafe at Brunswick in Melbourne

The federal government is calling on the Fair Work Commission to refrain from giving Australia’s 2.2 million low-paid workers a substantial pay rise on July 1. Pictured is a cafe at Brunswick in Melbourne

‘Given the current uncertainties in the domestic and international economic outlook, the government therefore urges the panel to take a cautious approach.

Taking into account the importance of creating jobs for Australians and ensuring the viability of the businesses, particularly small businesses, which provide the jobs which are crucial to the economic recovery and the wellbeing of Australian families,’ it said.

The National Farmers Federation went further in its submission to the annual wage review, arguing minimum wage workers should get no pay increase until the Covid vaccine was given to most Australians.

‘The NFF recommends that the minimum wage be maintained at current levels until economic conditions have improved, market volatility has decreased, and the level of financial risk lowered,’ it said.

‘These conditions can be reasonably expected to materialise once trends indicating a recovery can be confirmed and the risk of additional waves of infection minimalised following the roll-out of the AstraZeneca vaccine.’

Mr. Fleming said the prospect of more weak wages growth would put struggling consumers at risk.

‘If expenses are going up, out of your control, and income is stagnating, there’s a problem,’ he said.

Money wellbeing app Financial Mindfulness surveyed 645 Australians and found 34 per cent of them would be unable to raise $2,000 to cover a financial emergency.

Almost half, or 45 per cent, could not meet their weekly household bills, the barometer of economic health taken in February 2021 found

On July 1 last year, the Fair Work Commission agreed to give minimum wage earners a $13 a week pay increase which saw their wages edge up slightly to $753.80 a week or $19.84 an hour.

The 1.75 per cent wage increase was below the inflation rate at the time of 2.2 per cent.

Since then, inflation was shrivelled to just 0.9 per cent, putting it well below the Reserve Bank of Australia’s 2 to 3 per cent target range.

As found in the Daily Mail

Daily Mail

By STEPHEN JOHNSON, ECONOMICS REPORTER FOR DAILY MAIL AUSTRALIA.

 

Posted on

Graduates arrive in their careers with financial stress

Uni students become more debt laden

Graduates arrive in their careers with financial stress.

Graduating from University is an exciting and rewarding experience.

The prospect of being in the field of your choice and apply those years of learning is one of hope and excitement, however there are elements of fear.

Fear of ‘will I be good enough?’, fear of performing to keep this new job, and the fear of the amount of student debt that needs to be repaid.

This last fear has only been increasing over recent decades.

Today Australian degrees cost between A$20,000 and A$40,000, but by 2026 the cost of the average three year degree in Australia will have swollen to over $A50,000; four year degrees, especially those from prestigious universities in high demand subjects would costs substantially more.

The current threshold at which graduates must begin to repay their loans (at four per cent per pay packet) is A$45,881 in 2019/20, roughly the median starting salary for an under-25 Australian resident bachelor’s degree graduate.

A law graduate could expect $55,000, a computer science grad $54,000, while an economics or accounting, psychology or veterinarian studies major both faced $50,000.

Overall, male graduate starting salaries were $55,000 and females were $53,000.

At present $1.9 billion is never repaid (because students fail to reach the repayment income threshold or move overseas) which is expected to grow to $4 billion by 2026.

A HECS-HELP loan, provided by the Government, is subject to interest rates based on the Consumer Price Index. The rate is currently 1.8 per cent.

With the size of student loans growing, the threshold for repayment dropping and work intensification showing no sign of slowing, it’s easy to see where this is headed.

Graduates seem certain to arrive in their careers burdened by financial stress, the single biggest cause of stress for Australians and Americans.

In the US the situation is much worse. Aggregate student debt is $1.5 trillion in 2020, up from $250 billion in 2004 according to the Brookings Institute. Student loans are now the second largest slice of household debt after mortgages, bigger than credit card debt.

About 42 million Americans (about one in every eight) have student loans. The size of this problem was a big issue in the 2020 US presidential campaign.

As students pour into the workforce with financial stress, this will only put more pressure on an already financially stressed workforce, the cost being wellbeing and lower work productivity.

What can be done to abate this growing issue comes down to companies recognising this problem and putting in place wellbeing programs to support its workforce.

The wellness programs offered by employers globally is growing, however it is coming from a low base.

Why has employers taking so long to implement wellness initiatives?

The reasons were highlighted in the Global Wellness Institute Report in 2016.

The range of reservations expressed by employers is wide and varied. A key one was the lack of proof that workplace wellness programs are cost-effective and contribute to company performance.

Financial Mindfulness has developed such a report via its Financial Stress Index (FSI).

The Founder & CEO of Financial Mindfulness says “the FSI measures and tracks employee financial stress for businesses to increase employee productivity and their financial wellbeing.”

“The FSI is used to compile the FSI Quantitative Assessment Report (FSI reports), a leading indicator on how and why financial stress is impacting employee productivity. The FSI and its reports were developed by leading Neuropsychologists, finance and data experts.

Measuring employee financial stress informs employers how, why and where financial stress is impacting on their employees, estimates the cost of lost productivity to their business and comes with suggested solutions.”

Posted on

Mindfulness to remain a key part of what it means to be human in the future

Mindfulness to remain a key part of what it means to be human in the future

Mindfulness to remain a key part of what it means to be human in the future.

While we look in awe at the videos of amazing robots coming out of labs worldwide on ever smarter smartphones, sceptics and academics are meanwhile busy wrestling with the real value of mindfulness.

A leading British expert has made a huge claim linking the two.

“Mindfulness may come to be seen as the core 21st century capacity, because it concerns our only competitive advantage over the machines: awareness itself,” wrote Jamie Bristow, director of the Mindfulness Initiative in the United Kingdom. The Initiative is an institute that lobbies politicians to include matters “of the heart and mind” in their policy decisions worldwide.

That’s right. We may actually have an edge over machines.

We have known for decades that machines have the potential to outperform humans in almost all areas of life. The World Economic Forum (WEF) concluded in a 2020 report that “a new generation of smart machines, fuelled by rapid advances in artificial intelligence (AI) and robotics, could potentially replace a large proportion of existing human jobs.”

In the next few years, 3% of jobs will be potentially automated by AI, according to PwC’s report “Will robots really steal our jobs?” Increased digitization resulting from COVID-19 may accelerate this trend. By the mid-2030s, as AI advances and becomes more autonomous, 30% of jobs and 44% of workers with low levels of education will be at risk of automation.

“Artificial intelligence and robots are not just challenging blue-collar jobs; they are starting to take over white-collar professions as well. Financial and sports reporters, online marketers, surgeons, anaesthesiologists, and financial analysts are already, wrote Business Insider’s Kathleen Elkins.

The ‘technological singularity’ is the name given usually given to the point at which artificial superintelligence sees machines ‘transcend’ human beings. Some experts in the area believe this will happen before 2045, although Google’s director of engineering, Ray Kurzweil thinks machines will match human intelligence by 2029.

A slightly newer take on the idea is that it’s not black and white, and that we are simply merging intelligence – a process that accelerates the more we rely on it. Think of our use of google maps instead of street map books of just 15 years ago.

So, as we merge with machines, what parts of us survive?

Writing for Mindful.org, Jamie Bristow pointed out that some of the world’s thought leaders are looking past inevitable explosion in AI and to how our innate humanity can solve problems robotics cannot.

One of the key issues put forward at the 2017 World Government Summit in Dubai was that “We need to develop 21st century job skills that cannot be replaced by robots and AI, which means exploring and cultivating what makes us uniquely human.”

Bristow alluded to the fact that plenty of parts of many jobs, such as being listened to by, for instance a GP, carry value beyond anything a machine could do.

In 2021, Bristow was more certain than ever than our innate humanity

‘As the ‘fourth industrial revolution’ advances, bringing with it increasing automation and escalating AI, it will be ever more necessary to retell our stories of purpose and value around qualities that are innately human,” he wrote in a recent paper, Mindfulness: Developing Agency in Urgent Times.

“Indeed, it has been suggested that we are entering the age of humanics rather than robotics: “an age that integrates our human and technological capacities to meet the global challenge of our time.”

A great example of this at play is how Big Tech is paving the way with the global roll-out of the COVID-19 vaccines. “Globally, we will be using everything from AI to machine learning, the Internet of Things, and blockchain to process huge amounts of data about vaccinations happening in real time, says Daniel Newman principal analyst of Futurum Research. And the data isn’t just about “shots in arms.” It’s about cold-chain traceability (proper storage), serial number verification, vehicle routing and geofencing of vaccine delivery, and more. It’s a supply chain problem at a massive scale.

Another key idea proposed at that summit, by Professor Klaus Schwab, founder of the World Economic Forum, was “new, human-centered thinking—considering happiness, wellbeing, purpose and meaning” in policy-making. Human happiness was also consistently near the top of the agenda, especially with mass unemployment a big possibility due to automation.

“It goes without saying that anything that we can do on autopilot, robots and AI will soon do better,” Bristow wrote.

Mindfulness could be a key, partly because it can be much more powerful than simply quieting the mind.

“Mindfulness practice is about more than just attention training. It’s also largely about developing kind curiosity towards inner experience, and provides a framework for deep inquiry into the psychological mechanisms of distress and wellbeing,” Bristow wrote.

In other words, when we observe thoughts without judgement we can see past our own insecurities and find it easier to empathise with others.

“This heightened empathy arises in part through the development of body awareness—as it turns out, the more we are grounded in the body and know stillness, the more we can feel moved,” wrote Bristow.

Psychologists who utilize mindfulness in their work might well add guilt and healthy shame to empathy on a list of things machines could mimic but would find it very difficult to do as naturally as humans. Could a machine that malfunctioned and injured its owner slow its output and produce extra reporting until it had regained trust?

If you consider financial stress too, it’s hard to imagine how machine learning can cope with the highly complex emotions involved in our dysfunctional and illogical behaviours with money – such as shame and remorse from things like gambling, impulse spending, or comfort-spending.

A mindful approach is inclined to accept the confusing, even contradictory and move forward purely based on empathy not only a focus on outcomes.

“Far from just another fad, perhaps the mindfulness craze is the start of a macro trend towards putting self-awareness and contemplative practice at the centre of human endeavour. Let’s hope so.”

It’s hard to argue with that – unless you are a super smart phone capable of understanding this on your own.

Posted on

Money doesn’t make you happy, but bad debt makes you sick

Money doesn’t make you happy, but bad debt makes you sick

Money doesn’t make you happy, but bad debt makes you sick.

You can’t buy happiness, goes the old saying. We also know that being in poverty decreases happiness, but instinctively we know having lots of money doesn’t guarantee happiness.

Research backs up the motherhood statement too. In a landmark study, Daniel Kahneman and Angus Deaton, of Princeton University found that after an income of US$75,000, earning more money does not increase happiness.

In 2010, the pair studied the survey responses of 450,000 Americans and found that “high income buys life satisfaction but not happiness”, aka emotional wellbeing.

Then in 2020, three Harvard researchers, Ashley Whillans, Lucía Macchia and Elizabeth Dunn looked at whether prioritising time over money left us happier than focusing on money over time by studying 1000 students graduating from the University of British Columbia.

In short, the students who aimed for money were less happy a year after they graduated than those who made time a priority.

It seems even more obvious that people with lots of debt are not happy, but the extent to which this is true is shocking.

In 2016, Australian investment advice company Acorns Grow Australia surveyed 1000 people and found 70 per cent suffered depression and anxiety because of their money worries, while 76 per cent had trouble sleeping for the same reason. More than half assigned physical health problems to money worries.

In 2013, University of Southampton researchers Thomas Richardson, Ronald Roberts and Peter Elliott found links between severe unsecured debts (such as credit card debt, student and personal loans) and poor health, especially mental health by reviewing 65 previous studies.

Those with unsecured debts were 3.24 times more likely to suffer “mental disorders” than those without unsecured debt and 2.77 times as likely to have depression. They were 2.68 times more likely to be problem drinkers but a scary 8.57 times as likely to be dependent on drugs. Sadly, people with debt are 7.9 times more likely to take their own lives.

Back to the Acorns survey results, a third of Australians aged between 25 and 44 had “abused” alcohol because of financial stress, while 20 per cent coped with money worries by using illegal drugs. It did not say how many turned to prescription drugs to manage.

“The majority of studies found that more severe debt is related to worse health,” the Southampton university team found. Their research was published in the Clinical Psychology Review.

Then there’s the phenomenon of ‘debt-anger’, in which instead of getting fearful about money, people in debt get very angry. By definition, the person affected becomes stressed, and can experience damage to their relationships, feelings of isolation and despair and even weaken one’s immune system.

Australia has world-leading levels of household debt according to most measures. When debt is taken as a percentage of net disposable income, Australia had the fifth highest debt per household out of 35 OECD nations, at nearly 210 per cent of net income, in 2020.

Australia was also the worst in the Asia-Pacific region, in relation to its household debt-to-GDP ratio, according to The Asian Banker website.

Even though most of Australia’s household debt is related to wealth creation or an asset, such as a home loan (the average mortgage debt is $350,000), well over a third of Australians (37 per cent) report they are struggling to repay their debt.

In various research the percentage of Americans struggling with debt is anywhere between 30 per cent and 70 per cent. Even the smaller number is a huge worry.

Citizens of both nations – and people throughout the so-called ‘first-world’ – repeatedly cite money worries as at or near the very top stressors in their lives in surveys and studies.

The Southampton university study didn’t go into which came first – poor mental health or money problems. But the links are clear and so is the message: heavy financial stress will either make you sick, or keep you that way.

The study also didn’t go into what to do about severe financial stress – but there’s plenty of advice out there. The traditional options include consolidating debt, budgeting and financial planning, or studying or working longer hours to try and land a more lucrative role. The latter approaches can come with their own problems: the stress that results from overwork and social disconnection.

One widely praised and usually inexpensive option is to be mindful about money. Mindfulness, defined by some as moment-by-moment awareness, helps to still the mind and improve messy and negative thinking. A huge amount of research worldwide has shown mindfulness positively affects a range of mental health issues including depression, anxiety, memory loss and sleeplessness.

If you are experiencing distress in your life and live in Australia call: Lifeline 131114, Mensline 1300 789 978 or Beyond Blue 1300 224 636; regarding debt problems, the National Debt Helpline may be of use on 1800 007 007.

Posted on

Financial stress a perennial reason couples split

In a sea of couple conflict, find stability

Financial stress a perennial reason couples split.

It’s February already and in a lot of relationships that means money worries will be to the fore.

It’s well known amongst lawyers that returning to work after the holidays brings up dissatisfaction amongst couples.

The pressure of being forced together more often, especially with the added burden of home-schooling during the pandemic, has only increased tension for many couples.

The first working Monday of the year is even known as “Divorce Day” by some lawyers because of the increase in enquiries about separation after the stress of Christmas and the New Year.

Dig a little deeper and you’ll see a correlation between that stress and the bills coming in following holiday spending. A lot of it is financial stress.

Money stress has long been a source of relationship pressure.

“Arguments about money is by far the top predictor of divorce,’ said Kansas City associate professor Sonya Britt, from the university’s family studies and human services program, in 2013.

“It’s not children, sex, in-laws or anything else. It’s money – for both men and women,”

Britt, who specialises in “financial conflict within relationships” ran a study of 4500 couples as part of America’s National Survey of Families and Households.

It was published in Family Relations, a journal of applied family studies. The study accounted for income, net worth and debt and found “it didn’t matter how much you made or how much you were worth.

“Arguments about money are the top predictor for divorce because it happens at all levels.”

Britt also found arguments about money took longer to resolve and recover from than other disagreements and used harsher language.

Her research seems to be backed up by people who sought information on relationship therapy in Australia.

An online survey of 2050 people who visited Relationships Australia’s website in late 2015 found nearly 85 per cent thought “financial problems were likely to push couples apart”. More than three quarters of the respondents were women.

This was a big increase on the last time the counselling provider surveyed web visitors on money issues, in 2011. Back then 71 per cent thought money dramas could split couples.

The survey drilled further into why money worries might lead to separation – and the answers were varied. But several of the main causes related to stress; 25 per cent thought financial problems caused “too much stress”, while another 15 per cent answered: “a lot of people can’t cope with the stress”.

Nineteen per cent said money troubles “caused fights” and 12 per cent said such issues “caused blame”.

But the biggest single reason cited in the survey was the more diplomatic “people have different priorities/expectations”, which is another way of saying people disagree about money – presumably how much is enough, as well as how to spend and /or save it.

One finding in particular from the survey showed how mixed up couples are about money: around three quarters of female respondents reported that their male partner managed finances, exactly the reverse of how male respondents answered the question.

In other words, while everybody seems to think they are in charge of the money, nobody seems to be communicating well about finances.

This was backed up by a different set of questions Relationships Australia asked respondents in 2019 – the degree to which couples discussed finances.

Prior to making a commitment to their current of most recent partner, 56% of survey respondents reported they had not discussed how they would manage their couple finances if one of them no longer had an income.

A significant majority of women (74%) and men (69%) reported they had not discussed how they would divide their finances if their relationship ended.

“A mindful approach to money is without doubt a more successful one and a key to living mindfully is being able to accept reality for what it is – good, bad or neutral,” said Andrew Fleming, CEO/Founder of Financial Mindfulness.

It’s not a great leap to see that this can stretch to couples keeping secrets from each other about their finances.

“When we can accept reality, we can admit where we are at with money, not be so intimidated by it and we can discuss financial problems within relationships too.”

“That takes a lot of stress out of relationships, and everyone benefits from that.”

Posted on

Using Mindfulness practice to help reduce financial stress

Financial freedom

Using Mindfulness practice to help reduce financial stress.

Mindfulness has been a big buzzword for several years.

The cabin-fever worry of the COVID pandemic reinvigorated mindfulness as a solution too. Mental health organisations, major news outlets, universities and of course meditation programs  were discussing the merits of mindfulness as a way to deal with COVID stress.

In recent years, mindfulness stress-reduction programs have emerged as a key plank in corporate wellness programs too – the new gym-at-work, except for the mind.

Mindfulness programs, run by external trainers and delivered in-house to stressed-out employees are in hot demand as employers seek to curtail the impacts of a big range of lifestyle and mental health issues that lead to costly absenteeism and its sneakier sibling, presenteeism.

There is little doubt mindfulness practices – which range from yoga to tai chi and the most popular recently, mindfulness meditation – work.

Researchers for the American Psychological Association, Daphne Davis and Jeffrey Hayes found many clear benefits from a broad review of prior research into mindfulness.

Davis and Hayes’ 2012 practice review What Are the Benefits of Mindfulness? A Practice Review of Psychotherapy-Related Research, found mindfulness “decreases rumination” (or ‘over-thinking’), improves memory, reduces anxiety and depression symptoms, people to become “less reactive” and more flexible in their thinking.

People who meditate were found to be better at “self-observation” and could adapt better to “stressful and negative situations” and concentrate better after receiving “upsetting stimuli”.

But the issues that worry us enough to interrupt our work and sleep are so mind-bogglingly varied that general, one-size-fits-all mindfulness programs could conceivably frustrate us as we are encouraged to gradually become more mindful across every areaof life.

Wouldn’t it make more sense to apply targeted mindfulness practice to one or two areas of life? Maybe the ones that stress you out the most?

Think about that: don’t we need distinct mindsets to resolve relationship issues, compared to say, problem-solving our career stagnation, compared to finding the calm and patience to cope with a major health scare or crisis, compared to the action needed to reign in our ballooning credit card debts?

One of the biggest issues stressing out employees is something not often associated with mindfulness meditation: financial stress.

The American Psychological Association’s Stress in Americansurveys consistently report high rates of financial stress. In 2020 it found that 73 per cent of Americans with a household income of under $50,000 reported money was a significant source of stress.

It’s not a one-off result. 73 per cent of all Americans rank their finances as the No. 1 stress in life, according to new Capital One CreditWise survey.

Another survey by Thriving Wallet, a project backed by Arianna Huffington’s Thrive Global and Discover, found that 90 per cent of Americans said financial considerations have an impact on their stress levels

In Australia, it is estimated at least 2.44 million people are suffering financial stress, with about a quarter of women in financial stress, compared to 14 per cent of men.

The numbers come from AMP’s 2019 Financial Wellness report, which found that financial stress has affects more than personal lives.

“While many people think money worries are a personal issue, our research shows being financially stressed spills into your working life, increasing absenteeism and impacting productivity,” said AMP Director of Workplace Super, Ilaine Anderson.

The report estimated that financial stress costs businesses $31.2 billion a year in lost revenue.

While one solution AMP suggested was financial goal-setting, given the amount of distress and discomfort money causes us, could there be other answers too? What if mindfulness practice could dramatically change not only the way we view our money problems, but lead us to concrete actions that solve some of them?

Andrew Fleming, Founder of Financial Mindfulness,says mindfulness practice can help with obvious but hard-to-control problems like overspending in two ways. The first is to help you stop re-living the kind of fantasy in which it’s somehow okay to continue living beyond your means.

“You become more aware of the situation not as you want it to be, but as it really is,” he says.

“The second thing it does is to create calmness, less emotional reactivity and a balanced mind, so you can deal with the ups and downs of life. Then you are better equipped to deal with whatever situations you face, with calm focus and clarity.”

So mindfulness may not directly improve your financial circumstances, at least not straight away, but it is capable of quickly reducing the pressure you feel about money – which is by definition your sense of financial stress.

Fleming says practicing techniques like meditation can go further too, putting you in a frame of mind to find solutions to stubborn problems with their personal finances.

“Most people from when they wake up to when their head hits the pillow mind are constantly switched on, moving from task to task to task all day long. When the mind is constantly switched on, it’s inevitable stress will occur.

“Mindfulness is a maintenance tool to help develop clarity of thought to create space in the mind for new ideas and innovations, new ways of changing or improving current circumstances.”

Posted on

Financial stress and under-earning

Financial stress and under-earning

Financial stress and under-earning.

When people think about answers to financial stress a lot of energy and attention is paid to our spending. Where does all our money go, we are urged to ask of ourselves and our partners.

The implication is clear: if we suffer financial stress we share a flaw – impulsive and sometimes reckless spending. We can easily go straight to the conclusion that we are over-spenders, who use spending to numb out boredom and difficult emotions. We might even think we are greedy.

For some people, sadly, those are harsh truths. But just as many people try with all their willpower and attention to detail and live within their means, and cannot seem to make ends meet. For many people, a polar opposite problem to over-spending applies under-earning.

Earning less than your skills suggests it wouldn’t be a major problem if it wasn’t so damn expensive to live; so huge numbers of people are driven into debt.

It isn’t cheap to live in Australia, especially in a capital city like Sydney.

According to Numbeo (the world’s largest cost of living database), the cost of living in Australia is 17.6% higher than in the United States. In fact, it’s cheaper to live in countries such as France, United Kingdom, Germany and Canada.

US households on average carry US$145,000 (A$187,400) in debt, according to the personal finance website The Ascent. In Australia the figure is even higher, skyrocketing beyond A$250,000. Much of those debts are mortgage repayments, an essential cost and also an investment in our futures.

But what about credit card debt? In the US, the average credit card debt per household is US$7,000 according to nerdwallet.com, while the average American with a student loan owes $56,000 and the average car loan is $27,000.

Card debt is lower in Australia, around A$2500 per cardholder, while car loans are slightly higher here.

It’s not yet known what the average debts owed to credit services like Afterpay and ZipMoney are as they are too new, but the national bill in Australia is thought to be over $1 billion.

“Many people believe that card and personal loan debts come from heedless spending, and to get out of debt you have to stop buying luxuries and living a lifestyle beyond your means,” says Andrew Fleming, Founder and CEO of Financial Mindfulness.

These assumptions are often wrong he says. “Often people use cards, credit services and loans because their incomes don’t match their expenses, especially when an unexpected expense comes along,” he says.

In most western economies it is well known that the cost of living – let alone the price of major life expenses like property – has outpaced inflation and wages for many years.

One answer to how we cope with going back even when we have the best of intentions is to confront the issue raised near the start of this article: under-earning.

But beyond a state, most of us find difficult, even shameful to talk about, what is under-earning, exactly?

First, it’s useful to identify what under-earning is not.

Barbara Stanny, author of Overcoming Underearning: A Five Step Plan for a Richer Life wrote in Forbes in 2011 that an under-earner is not someone who chooses a low income or a simpler life without much work.

“It is always a CONDITION OF DEPRIVATION[sic] not just of money, but of time, joy, freedom, choices and self-esteem,” Stanny wrote.

Under-earners are often drowning in debt and vague about money, she wrote. They might even have an “anti-money attitude”, unwittingly sabotage their own career prospects and underestimate their value at work. Often they are also co-dependent (meaning they put others’ needs ahead of their own).

Under-earning is a chronic condition that’s not going to be fixed in a day, let alone by reading an article, but awareness of it can start to break decades-long negative cycles.

People work through deep-seated issues like using anything from various forms of therapy to mindfulness practice.

The latter approach can help alleviate financial stresses and strains at two levels. “Mindfulness practice won’t necessarily change your earnings,” says Andrew Fleming.

“But it will give you a new awareness of what you are doing and help change your approach to what and how you spend and what you earn.”

He says regular mindfulness practice will help people clearly see the reality of their situation, “instead of being stuck … with your mind racing 100 miles an hour” – and will give you the calm to deal with it.

And you’ll need that calmness because negative, even painful feelings are likely to come out of seeing the realities behind your financial stress.

“Frustration and discomfort can be a sign of a breakthrough, a new awareness,” Fleming says.

“It might help you take action, perhaps asking for a pay rise and being confident when doing so, having an authentic conversation with the boss or it might put you into gear to pursue a better-paid vocation, either within the same company, the same industry or by doing something totally new.”