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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.

 

 

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Australians rebounding from pandemic

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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

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

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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.

 

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March 2021 Financial Stress Index (FSI) report

Financial stress devastating Australians

March 2021 Financial Stress Index (FSI) report

Number of Australians ‘thriving’ bounces back dramatically as Covid nears end, but worst affected still suffering.

Australians assessed as ‘thriving’ financially – a group that slid backwards eduring the first six months of the Covid pandemic – have bounced back and are doing even better than before the health crisis.

According to the Financial Mindfulness Financial Stress Index (FSI), over a quarter – 25.8 per cent of 645 respondents – were rated as ‘thriving’ between the six-to-12-months into the pandemic from their answers to the FSI questionnaire

The proportion thriving was 18.8 per cent pre-Covid, but that crashed to 2.4 per cent during the first six months of 2020 as a big proportion of people slid into the next category down.

“Many people became extremely uncertain and worried about their financial position during the pandemic,” said Financial Mindfulness, CEO and Founder, Andrew Fleming.

“But extended Government support very likely stopped financial stress from spiralling.”

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

“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, GDP levels increasing and another property boom.”

The FSI tracked financial stress in detail – and across a range of metrics – over the last 18 months, at six monthly intervals, and captured the ongoing impact from the COVID-19 pandemic.

Depending on their answers to a set of 35 questions, respondents fell into one of five bands: distressed, stressed, managing, succeeding or thriving.

Overall, FSI data found an estimated 2.09 million Australians are experiencing levels of financial stress that reduce their wellbeing and capacity to function.

Financial Mindfulness estimates the associated lost productivity costs Australian business an estimated $27.02 billion per annum – a $5 billion improvement over the last 6 months.

The proportion of respondents ‘managing’ fell from 41.5 per cent in the first six months of the pandemic to 26.1 per cent in the six months from September 2020 to the end of February 2021.

There was a similar but smaller drop in the proportion in the ‘succeeding’ category. The migration of so many respondents to now be ‘thriving’ was partly responsible.

At the other end of the spectrum, a smaller number of people in chronic financial stress – categorised as ‘distressed’ – has continued to increase throughout the pandemic, with financial and psychological factors the main drivers.

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

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

Key findings from Financial Mindfulness FSI report (Sept 2020 to Feb 2021) include:

  • 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.
  • Decrease in ratings of always feeling isolated, however a small increase on pre-COVID19 levels.
  • Of those who are financially stressed, a large proportion feel worried (86%), overwhelmed (72%), and downhearted (75%) about their financial situation.
  • 64% of people experienced financial shame.
  • Those who identify as excessively eating, drinking, smoking due to their financial situation returned to pre-COVID19 levels.
  • On average 16% of people often have physical stress relating to their money worries.
  • Agitation is the most common somatic symptom of financial stress (71%), followed by tension (69%) and inability to “wind down” (65%).
  • 71% of people are distracted because of financial concerns.
  • Many take an ‘ignorance is bliss’ approach, either ignoring the situation (57%) or recklessly spending (57%).
  • 66% of people note financial stress has negatively impacted their relationships.
  • 59% experienced conflict with loved ones.
Financial stress devastating Australians
Financial stress devastating Australians

About the Financial Stress Index (FSI)

The FSI is a leading measure of total financial stress burden, and levels of financial stress impact across five dimensions; Financial status, Psychological impact, Behavioural signs of stress, Physical/Physiological burden and Social engagement.

The levels of financial stress are expressed on a scale; Thriving, Succeeding, Managing, Stressed and Distressed.

 

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Find stability with Financial Mindfulness

Find stability with Financial Mindfulness

Find stability with Financial Mindfulness.

With a horrible year in 2020, routines have returned back to normal but 2021 hasn’t started well. David, 51 and Lisa, 46 are parents to Joshua (8), Jake (13) and Bella (11).

Josh misses his dad while Bella is angry at her dad and hasn’t seen him for 4 months. She quit her after-school job at a retail chain because she has exams this year. Jake’s behaviour problems at school have worsened since the break-up.

David works as an executive in a chartered accountancy firm and has strong earning capacity but as a divorce seems likely he may have to give the house to Lisa as it’s simpler for the children to spend the school week with her.

Both David and Lisa have been emotionally and physically affected by the separation and are worried about the future. Although each have big financial worries, they have become less careful with money, sometimes spending to numb emotions like anger, grief, loneliness and sadness.

Both David and Lisa would see improvements to their mood, energy and sense of security if they introduced proven mindfulness practices into their lives, especially around how they use money.

In other words, Financial Mindfulness. Mindfulness is not, as some people believe an attitude, but is better described as the regular practice of moment-by-moment awareness.

A ‘financial wellness’ study of PwC employees found 52 per cent stressed about their finances with 45 per cent reporting more financial stress in the last 12 months.

More than half of Australians say personal finance issues are the leading cause of stress in their life, according to the Australian Psychological Society.

Reconciliation after 17 years of marriage seems unlikely for David and Lisa. The couple argued loudly at home for six years before they agreed he would move out.

Lisa is angry and feels disrespected and that David has been a poor husband, although she accepts, he has mostly been a good provider and done his best as a father. She accepts some contact with their father is good for the children but struggles with any interaction with David.

“How can I trust anything he does now?” she often hears herself saying to friends and family.

Lisa feels resentful with three children to look after and tries to make herself feel better by socialising with friends over dinner, at concerts and art galleries, pampering herself (at health retreats when David has the kids).

She has taken a few short holidays and one extended one to Britain where her sister and her husband live and then through Europe. She also re-joined the gym because she is drinking and eating more and has started smoking again. She is still working in human resources as a consultant but has a rising credit card debt.

David now lives alone in a two-bedroom apartment 30 minutes from the family but still does maintenance on the house he owns with Lisa, though he isn’t welcome to let himself in. He also maintains their investment property.

Since the separation (7 months ago), David drifted into depression and is finding seeing the children for only 3 days each fortnight difficult. He is working longer hours, going out for late dinners, is drinking more and goes on fishing and golfing trips with old friends.

He has also increased his spending on his two collecting hobbies: wine and sports memorabilia but is also gambling too often. He recently lost his driver’s licence for drink-driving.

“I sometimes wonder what the point is to any of this,” David often thinks. “Without the kids there wouldn’t be much to life for me.”

Both David and Lisa are doing individual therapy and meet for family counselling once a month. But growing financial pressure and stress is not helping their coping skills and both find themselves unhappy and snapping at their children sometimes.

In the coming months, separated couples like David and Lisa find it very challenging to manage their finances, can find some respite by empowering themselves with an app that reduces and measures financial stress by Financial Mindfulness.

Financial Mindfulness will bring a completely new element to the world of personal financial behaviour by giving people medically and scientifically-proven tools to make spending decisions that they will be proud of later (instead of regretting).

“Everybody has a need to manage their financial affairs in a complex world. We understand people would like to improve their financial wellness.”

“We can actually help, for the first time people can choose a comprehensive, medically tested personal pathway of actions, to take responsibility in dealing with their financial stresses.

A personal program as an app, also transferrable to your computer.”

“Financial Mindfulness creates a pathway for users from the experience and impact of ‘financial stress’ to one of financial health, wellness and fulfilment.” says Financial Mindfulness Founder & CEO, Andrew Fleming.

“As a result, people like David and Lisa will become more self-aware and take responsibility of their unhealthy financial habits and use the tools of our program to form new healthier behaviours over time.

This improves their self-esteem, their productivity at work and by extension, improve the lives of their children.”

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Financial Mindfulness exclusive interview with Dr Ellen Langer – Part 2

Financial Mindfulness exclusive interview with Dr Ellen Langer

Financial Mindfulness exclusive interview with Dr Ellen Langer – Part 2.

We continue with our exclusive interview with the world-renowned Professor Ellen Langer. Part 1 can be found here

Financial Mindfulness:

So, what is the difference between mindfulness and positive thinking?

Dr Langer:

“Positive thinking says things are positive, by definition. Mindfulness says outcomes are neither positive or negative, they are what they are.”

“If you compliment someone and they take that as ‘oh aren’t I wonderful’, then they become vulnerable to an insult.”

“But if the compliment is neither good nor bad, then the person complimented is pleased, but better able to deal with changes in the other person.”

“When you understand that outcomes can end in any number of ways, it would be foolish to always see the negative version.”

“I have been told I mark the edge of the optimism continuum!”

Financial Mindfulness:

You’ve said it’s not about meditation, why is that?

Dr Langer:

“Mindfulness is very different from meditation. Meditation is not mindfulness, meditation is a process, a program one goes through to achieve post meditative mindfulness.”

“It’s fine, it’s not mutually exclusive with the work I do and I did some early work in meditation but mindfulness as we study it is more immediate, not better or worse.”

“You can more easily work mindfulness into companies, schools and so on without people having to spend 20 minutes twice a day to meditate.”

“To be mindful is to stay aware of what’s going on, once you recognise that things are not always as thought, then you naturally stay tuned in.”

“It’s when you believe 1+1 always equals 2 and always will be, and can be nothing else that you don’t pay attention to the context.”

“So now every time someone asks how much is 1 and 1 you’re going to pay attention to the context, are they talking about piles of laundry?”

Financial Mindfulness:

Can you think of dangerous assumptions we make when our brains are on ‘autopilot’?

Dr Langer:

“What happens when you are on autopilot is you are presuming everything is going to stay the same.”

“Let’s say you’re driving on ice and the car starts to skid, what do you do? You ask this of people older they’re going to tell you that you gently pump the brakes to get control of the car.”

“That was the right thing to do before there were anti-lock brakes. Now there are anti-lock brakes the right thing to do is to firmly hit those brakes, hard. What you were taught is not only ineffective its likely to cause accidents.”

“Things are changing all the time, all things, and most advice was good then and may not be so good now. So, understand that change is inevitable.”

Financial Mindfulness:

Why has mindlessness become so pervasive?

Dr Langer:

“Because that’s what schools teach – they teach absolutes, they teach that 1+1 is 2 and always will be 2, rather than realise that the right answer always depends on the context.”

“So, I tell the story I was at a horse event. I’m a straight A student, right? This man asked me if I could watch his horse for him cos, he wants to get his horse a hot dog.”

“Well, I thought ‘that’s ridiculous, I’m Harvard-Yale all the way through nobody knows better than me horses don’t eat meat! Period. End of story’. Well, he comes back with a hot dog and the horse ate it.”

“And then I realised everything I thought I knew could be wrong. My As were hindering me rather than helping me.”

“Everything you think you know could be wrong in some context. Every time you think you’re wrong, it could be right in another context.”

“We don’t look for that though. Every time people make mistakes, they try to go back to the original plan, as if that original plan was handed down from the heavens, rather than that original plan itself was just a decision, which means there was uncertainty.”

“There are many things in place out there that teach us to look for absolute right answers, and as soon as we accept things as absolute, we’re setting ourselves up to be mindless.”

Financial Mindfulness:

How can being mindful during the pandemic help us?

Dr Langer:

“I wrote about something about people who have a view of defensive pessimism, that they are hurting themselves and should switch to mindful optimism. Defensive pessimism is assuming the worst and expecting the worst, but hoping for the best.”

“That’s problematic in two ways. First, you tend to get what you expect.”

“The second is around the idea of ‘hope’. Everyone around the world thinks hope is a good thing. I don’t. Being hopeful is better than being hopeless, but hope has built into it an expectation of failure.”

“You don’t get up in the morning, go into the kitchen hoping that you’ll get a cup of coffee. You just walk in and expect to get a coffee and you have the coffee.”

“Negative expectations lead us to be stressed and stress makes us more vulnerable to all disease.”

“If you assume an attitude of mindful optimism it doesn’t mean you have your head in the sand, or you’re not paying attention to things, it means you make a plan.”

“So, we have a pandemic. My plan is I’m going to keep social distance, wear a mask and wash my hands as frequently as I need to and then I just go about my business.”

“If you do that, as a result you’re building up the resources so should something happen you’re going to be stronger and better able to deal with it.”

“There’s a little expression that says ‘no worry before it’s time’ – it’s very important for your physical and your mental health.”

“Also, we need to remember life consists only of moments. This might sound a little like it’s from a Hallmark card, but there’s something deeper in it: remember your life is about moments. That’s all it is and where there’s a pandemic, whether you’re at home or work all you have is that moment.”

“If you make that moment matter, then it all matters.”

“A mindful approach means I can find real advantages to living in a pandemic and I think if we stop and become more mindful, most of us can.”

“An example is Zoom meetings.”

“I’m loving the zoom meetings, not just because I don’t have to worry about my choice of shoes and pants that day, but when I’m zooming with a large audience, I see everyone and they’re just a foot away from me. Whereas when I’m lecturing to a large group I’m here, and the audience is removed by being over there – normally it doesn’t feel as personal.”

“Zoom also gives me the names of everyone in my lecture, so if I have to ask you a question, I don’t have to make believe I remember your name, I just look and I see your name.”

Financial Mindfulness:

How can mindfulness help us with our working lives during the pandemic?

Dr Langer:

“One of the things I argue about a lot, although I haven’t written much about it, is we have many business gurus who push the idea of ‘work-life balance’.”

“It’s a bit like hope – hope is better than being hopeless but not as good as just assuming everything will be fine. Work-life balance is better than work-life imbalance.”

“But there’s a better way, which is work-life integration.”

“One of the strong advantages of all this working from home is more integration of our lives into work.”

“I’ve given lectures where my dogs have been barking and I’ve been talking to people and their young children walk in on them and so what? It’s all part of life and helps us integrate our home and our work life.”

“One of the big mistakes people make about work is putting up with feeling so stressed at work and I don’t think that that’s a good thing, I don’t think doing something 40 hours a week and being stressed is good for you.”

“So, in many respects the pandemic is a time to figure out what you enjoy, what you miss, what you don’t miss, and then you go forward with this opportunity that you wouldn’t have had, because you would have been in your typical routine.”

“So, try to enjoy your job. Sure, you can’t always be eating out of restaurants. I haven’t eaten out since Covid and I’m enjoying cooking enormously.”

“You come to learn that life isn’t going to rise or fall on one meal, so what if one meal turns out to be awful, who cares?!”

“Be aware of the possibilities and move on to enjoying the next moment!”

Financial Mindfulness:

Dr Ellen Langer, it’s been a pleasure, thank you.

Dr Langer:

Thank you, it’s been lovely talking with you. Stay safe.

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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.”

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Mindfulness can help you get in control of your spending

Mindfulness can help you get in control of your spending

Mindfulness can help you get in control of your spending.

Why do we spend money to feel good now, even if it’s obviously going to have negative consequences at some point, such as damaging financial stress.

And why do we seem to make better decisions if those decisions are planned and not impulsive?

The answer is complex, but just so you really get the ideas, first try to imagine yourself under a lot of financial stress. Maybe you are working and studying, and dealing with a worrying, ongoing health issue too – so you’re always flat-out busy, your mind feels ‘full’ and you have a sense of no end in sight.

Imagine how that stress feels in your body. It’s a difficult feeling, right?

Then without thinking, answer which of these options you’d pick:

  • buying two pairs of the same fancy shoes you like because they are in the window at your local mall or ordering them for 25 per cent less but having to wait a month.
  • selling your car today for $500 less than you could probably get because a buyer is ready with the cash and you want a weekend away or waiting for more money.

Many people probably favour the first option in each case because they want the ‘reward’ now.

Why? According to behavioural scientists, “present rewards are weighted more heavily than future ones. Once rewards are very distant in time, they cease to be valuable,” so says behavioraleconomics.com.

This was the finding of landmark research done in 2002 by Shane Frederick, George Loewenstein and Ted O’Donohue, and published in the Journal of Economic Literature.

Interestingly, when it’s not possible to be rewarded immediately, we will often wait longer to receive a greater reward. Research shows if given the choice between $100 in a year or $120 in 13 months, we are more likely to wait.

All this suggests when if we plan for the future, we are likely to make better decisions about money. But it depends what that future event is, and how far off it is.

If it’s a skiing holiday with friends in the Canadian Rockies next Christmas, we will probably start saving. But if it’s retirement at age 70 (as the Federal Government proposes from 2035), that feels somewhat less urgent, even though few would argue it’s more important than a skiing trip.

In a 2014 report on savings, the Reserve Bank of Australia showed “younger households place more weight on saving for large purchases and emergencies to smooth near-term consumption rather than saving for longer-term (retirement) consumption.”

“Some keys to managing decisions like these are to make those far-off outcomes feel closer,” Peter Sokol-Hessner, assistant professor in the department of psychology at University of Denver, The Huffington Post.

He suggested “to imagine how you’ll feel when you can use those retirement funds, how grateful you’ll be that your younger self sent this gift into the future.”

What has all this got to do with mindfulness?

Mindfulness is being fully aware of what’s happening in the present moment. When we can train our minds to be more aware of each moment – either through some kind of mindfulness practice like meditation, or just a deliberate change in mindset – we make better spending and saving decisions.

We can think about what we really need now, versus what we need in the future.

For instance, you may decide to do extra research before selling your car or home, looking more carefully at trends and brainstorming other ways to find ready cash.

A big benefit of becoming more mindful is it creates a buffer against the power of the external pressure to spend. Think about the hype involved around the release of the next stage of a sought-after apartment development: it’s in the interests of a real estate agent to get potential buyers into a feeding frenzy state with other potential buyers, so the stage sells out, the project can go up and the next stage goes into marketing overdrive.

“It’s not just real estate,” says Financial Mindfulness’s founder and CEO, Andrew Fleming.

“A lot of marketing works on the idea of scarcity and urgency, whether there’s only 100 in stock, or it’s a brand new order, or whatever. Think about new phones, new cars, something that is labelled ‘limited edition’.

“Marketing often works on us by getting us to make a decision before we’ve had a chance to think through all of the consequences.”

“Becoming more mindful will help you to buy things rather than be sold to. It’ll allow you to come from an understanding of your real needs, consider the consequences of your actions and respond by making decisions, rather than be manipulated by marketing.”

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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.

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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.