What to do if lockdown has caused me financial stress
Right now, millions of Australians are under public health orders to stay at home in an attempt to reduce the spread of the Delta variant of the Covid-19 virus all around the country.
More than half of all Australians face this uncomfortable but necessary reality, and it is producing feelings including loneliness, fear, worry, depression, and stress.
The unprecedented – and extended – interruption to normal life has worn so thin that for many, it’s starting to feel like a depressing new norm.
Uncertainty and fear were defining characteristics of the pandemic from the outset.
The uncertainty isn’t something we can do much about: nobody has a crystal ball.
Fears are a little more tangible. We fear for the health and safety of our families and ourselves.
Thankfully, there are plenty of official and expert resources to help people deal with their mental health during the pandemic.
Here’s a great government link with plenty of advice and links to specific types of support.
The respected Black Dog Institute has produced 10 tips for managing anxiety during Covid-19.
We suggest you use these links if you need them.
People also fear for their finances, and this isn’t just a ‘first world problem’; it’s real and much deeper.
While some of us are saving because we are not going out, the lockdown means many people cannot get to work and have lost hours, and therefore, their wages are reduced. In mid-August, it was revealed 150 child care centres closed – all have staff, and all those staffs lost wages.
In 2020 Australia experienced negative wage growth due to the pandemic-led economic downturn.
Or even worse, some have lost their jobs. This is acknowledged by the government’s latest round of Covid disaster payments.
Everyone losing wages or their job will experience financial stress, sometimes at an acute level, and if these changed circumstances persist or worsen, the financial stress will likely become chronic.
Fearing for our financial security shakes us to our core; for many of us, it feels like it’s about our very survival, even a matter of life and death.
Financial stress has moved from a fringe issue to a serious, even core problem. It is acknowledged by the likes of the Black Dog Institute’ managing financial stress during lockdown.’
‘Mental and financial health can be a vicious cycle,’ says Black Dog. ‘Financial instability can lead to poor mental health, which can make taking action to protect your financial situation harder.’
‘When people are under pressure, they may start drinking more or avoid talking to family and friends, which can make it even harder to cope.’
This blog looks at financial stress during Covid lockdowns – why we feel stressed, what we can do with financial fears, and what practical steps we can take.
Why do we feel financial stress during lockdowns
Hamish Ferguson, a Director at Vision Property and Finance, says it’s important to acknowledge that feeling financial stress during a lockdown is to be expected.
“Lockdowns introduce unpredictability into our lives. One of the requirements of effective cashflow management is being able to predict both your future income and expenses.”
There is a saying that in the absence of good information, people will make poor decisions.
There is a lot of emotion in the community, and at times misinformation spreads. This poor-quality information can affect people who give it too much attention, and some will either not look after themselves or spend too much money thinking that this is an excellent way to reduce stress.
‘Many of us will spend more money when we have higher levels of emotion,’ Mr. Ferguson says.
‘It is quite clear that emotion levels in society are higher, so this will produce binge spending or emotional spending at a higher level.’
What can we do about our financial fear during a lockdown?
Practicing mindfulness is not just about sitting down to meditate, though that is recommended.
Mindfulness is actually about paying attention to thoughts and feelings and is said by experts to resemble curiosity as a state of mind.
So be curious about how your spending patterns are changing and where your money is going.
That helps us achieve financial mindfulness, which is simply described as having awareness and paying attention to your finances and financial behaviours.
It means more than being money smart or financially savvy, as it includes the capacity to regulate emotional responses that can lead to unhelpful financial behaviour and financial stress.
‘One of the strategies that many professionals will suggest is to break down the information we receive into what we know to be true and separate it from what may or may not be true,’ says Mr. Ferguson.
This can help us to focus on more reliable information.
Another strategy is to focus on verbalising things we can be thankful for when stressed or anxious. For example, are you safe at home, and do you have good home-cooked meals and a relatively comfortable environment where you live?
Being thankful can help to balance the information we are receiving and not just focus on the negative.
An example of the power of positive thinking is that rather than just thinking “I might lose my job”, to say to yourself, “Last time this happened, my employer and the govt worked well together to enable me to keep my job. I don’t have any reason to think that this won’t happen again.”
We’d also suggest turning off the television, or the online and social media news updates, as often as possible.
Constant updates on Covid are not helpful to most people. Information from sources of dubious origin is even less helpful.
‘Sometimes we just need to switch the world off and enjoy the silence,’ Mr. Ferguson says.
He suggests reaching out to people in your community going through similar experiences, for example, work colleagues, family friends.
‘Especially reach out to those people that you see as positive or “glass half full”. They are more likely to help you balance your thoughts,’ Mr. Ferguson says.
What are some practical steps we can take
In a period where our emotions are potentially impacting our financial behaviour, especially in a negative way, it’s time to take a step back and look at the basics.
“Review all spending to ensure you are focusing on needs and not wants. Strip your budget back to bare basics,” says Mr. Ferguson.
He suggests focusing on identifying the real fears or stress points and finding someone to help you work through those.
“Community and communication are very important.”
If you are not budgeting or haven’t reviewed your budget for a while, then it’s an excellent opportunity to do so.
Why revisit my budget?
Instinctively, we know that budgeting allows us to manage money wisely, avoid financial stress, and be in control.
During a lockdown enforced by the government, one thing we don’t feel is in control. That’s not comfortable for many people. Budgeting helps us to get back some sense of control in our lives.
Also, it’s a habit that is always helpful to our financial situation.
Even if you have a budget, here’s a reminder of the main steps to building a budget:
- Properly determine your household income
- Begin tracking your living expenses over three months
- Balance your budget – subtracting all your expenses from all your income
- Go back and review your expenses – what’s missing?
- Review your income potential
- Balance your budget again, this time with nothing missing!
- Maintain your budget
Remember, most people who try to budget fail to get the benefits of a budget because they cannot maintain the practice.
Maintaining a budget involves several steps too:
- Schedule a budget practice
- Make budgeting a game that you win at
- Review the value of your money and simplify your budgeting
- Get smarter about your use of credit
- Get real about planning
- Experiment with ‘not spending’
- Nominate a budget buddy and become accountable
- Become proactive – and stay positive
You can read our complete blog series on budgeting at these links: why budgeting helps your personal finances, how to budget and maintaining a budget.
If you are still struggling with balancing your budget, you can seek support. You could consider contacting a financial counsellor or a budgeting coach for help.
Remember, budgeting is learning a new life skill; it takes practice. And at a time when you may feel worried, uncertain, or even out of control, it will help with financial fear and financial stress.
If you are struggling with your mental health, please seek help:
- Lifeline crisis support service (24 hours): 13 11 14
- Suicide Call Back Service (24 hours): 1300 659 467
- Beyond Blue phone support and online chat service (24 hours): 1300 22 4636 or www.beyondblue.org.au