The pandemic put young families under a huge financial stress burden

on November 04, 2021 / by Financial Mindfulness

The pandemic put young families under a huge financial stress burden.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our research also showed shows that poor financial security and financial stress lead to a lot of aggression in people’s interpersonal relationships, and we know it has a significant impact on relationships.

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

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

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

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

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

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

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

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

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