How to Deal with Financial Stress
Learning how to deal with financial stress and build financial resilience is key to your overall well being.
When your stress spirals out of control, it can feel impossible to recover. Recognising the early warning signs of financial stress such as increased anxiety or disrupted sleep is so important. By identifying these signs early, you can take steps to deal with your stress before it becomes too overwhelming and begins to seriously impact your life.
Financial setbacks or trying to buy a house can leave you feeling lost and is a common source of stress and anxiety, but there is hope!
In a recent podcast episode, we were joined by resilience expert, Graeme Cowan, and he provided some insightful discussions around mental health, particularly in men, and how to deal with financial stress. We have summarised the key takeaways to help you overcome these mental and financial challenges effectively.
Listen to the full episode to hear Graeme share his inspiring story of overcoming hardship and equip you with the tools and mindset to bounce back from financial hardship and build a stronger financial future.
Financial Stress and Mental Health
Financial stress is a significant source of anxiety for many, and it can profoundly impact your mental health.
When your financial obligations start to build up, and your income seems insufficient to cover your expenses, it is natural to feel overwhelmed.
This stress can manifest in various ways, including trouble sleeping, irritability, and difficulty concentrating. Chronic financial stress can lead to more severe mental health issues if you do not deal with it quickly.
Financial health and mental well-being go hand in hand, as one often influences the other.
When your financial situation is stable, you tend to experience a greater sense of security and peace of mind. This stability can lead to reduced stress levels, better sleep, and an overall more positive outlook on your life.
But when your financial health deteriorates, it can quickly lead to increased stress and anxiety. The constant worry about paying bills, managing your debt, or facing financial uncertainty can consume your thoughts, leading to a variety of mental health issues such as anxiety, depression, and even panic attacks.
Can Financial Stress Cause Depression?
Unfortunately, financial stress is a leading cause of depression in Australia, particularly for those who work in the corporate world or are the main income earners for their family.
The stress caused by financial difficulties can create a cycle of negativity. For example, if you are financially stressed you may find it hard to concentrate at work, which could affect your performance and potentially jeopardise your income and worsen your financial situation. This cycle can be hard to break without intervention and support.
This persistent state of anxiety and fear can evolve into depression, characterised by feelings of hopelessness, lack of motivation, and even physical symptoms like fatigue and aches.
The impact of financial stress on mental health can also lead you to withdraw from social activities, isolation, and strained relationships, as you might feel embarrassed about your financial situation.
Depression can make it even harder to manage your finances effectively which creates a vicious cycle. It is important to recognise these signs early and seek both financial and mental health support.
How to Deal with Stress from Buying a House
We get it, buying a house is one of the most stressful personal and financial decisions you can make.
The process involves large financial commitments, dealing with lenders or home loan mortgage brokers, negotiating prices, and managing legal paperwork. In markets like Sydney, where property prices are exceptionally high, the stress can be even more consuming.
Many first-time home buyers feel overwhelmed by the amount of debt they are taking on, the competitiveness of the property market, and the fear of making a poor investment. This stress can be dealt with by thorough research, seeking professional advice, and being realistic about what you can afford.
The COVID-19 pandemic significantly shifted work patterns, making remote work a viable option for many people. This newfound flexibility means that you no longer need to live in expensive cities to be close to your workplaces.
Think about renting out your property if you own in a major city like Sydney and moving to a more affordable location…even overseas! This not only reduces your living expenses but also allows you to maintain your investment property and possibly earn rental income. Remote work can enable you to have a more affordable and enjoyable lifestyle while preserving your financial stability.
Or you can look at property investments in areas outside of major cities where the yields are better. By investing in more rural regions with lower property prices but good rental yields, you can start building your property portfolio. These regional areas may offer more affordable entry points and still provide you with substantial returns on your investment.
Dealing with Financial Stress
Managing your financial stress requires a multifaceted approach. Resilience expert, Graeme Cowan, talks about the importance of self-care, including physical health (vitality), emotional wellbeing (intimacy), and having a sense of purpose (prosperity).
He also developed the Moodometer, a tool to help monitor and manage your emotional well being. When you are in the Red Zone, you experience anxiety, depression, and shame, leading to a significant drop in productivity. Your goal should be to steer yourself towards the Green Zone, where you feel more optimistic, resourceful, and positive. According to research by the Harvard Business Review, employees in the Green Zone are 31% more productive, sell 37% more, and are 300% more creative.
Here are some practical tips on how to deal with financial stress and move toward the Green Zone on the Moodometer.
Vitality
Physical Exercise
Regular physical activity can significantly reduce your stress. Simple activities like walking in nature can offer you so much mental relief. Find an activity you enjoy, whether it’s walking, swimming, or cycling, and make it a part of your routine.
Breathing Exercises
The Navy SEALs use the powerful breathing technique of breathing in through your nose for four seconds, holding for seven, and breathing out for eight. This exercise helps ground you in the present moment, reducing your anxiety and making your problems feel more manageable.
Intimacy
Support Networks
Don’t hesitate to reach out to support networks. Whether it’s talking to your friends and family or utilising professional helplines, having a support system can provide you with emotional relief and practical advice.
Seek Professional Advice
Getting good professional advice is critical. Whether from your GP, a psychologist, or helpline, seeking help can make a significant difference. With resources like Lifeline, Men’s Line, and other specialised support for different communities you can access free professional help, no matter where you are in Australia.
Perspective and Gratitude
Sometimes stepping back and putting your financial situation into a broader perspective can help. Comparing your situation to global hardships can provide a sense of gratitude for what you do have and more resilience towards your struggles.
Prosperity
Creative Financial Solutions
Be open to alternative strategies like investing in properties outside major cities with better yields or taking advantage of remote work opportunities to reduce your living expenses. Having a goal for what you want to achieve financially can help keep you motivated and focused.
Professional Advice
Seek advice from financial brokers or advisors who can provide personalised strategies for managing your finances.
Career and Work
Employees who find meaning in their work are more engaged, productive, and creative. This sense of purpose helps you stay motivated and resilient, and can lead to career advancement and personal satisfaction.
Long-term Financial Planning to Minimise Financial Stress
Building financial resilience often requires you to have a long-term perspective as financial success doesn’t happen overnight. By playing the long game, you can gradually work towards your goals, whether it’s saving for a deposit on a house or building a diverse investment portfolio.
Patience and strategic planning are key. Make small, consistent efforts that accumulate over time to create significant results for yourself.
Maintaining good mental health is crucial for thinking creatively about financial solutions. When your stress levels are high, it’s easy to fall into black-and-white thinking, where options seem limited.
However, when you’re in a healthier mental state, you’re more capable of considering various possibilities and innovative solutions. For example, rather than feeling stuck in an expensive city, explore options like co-ownership, buying in more affordable areas, or leveraging investment properties to fund future purchases.
Financial Assistance and Counselling
Financial stress is common but can also be manageable. You must understand the impact on your mental health that financial stress can have and adopt a proactive approach that includes seeking professional help, maintaining your physical and mental well being, and exploring creative financial solutions.
Reaching out for help is a sign of strength, not weakness, and can be the first step toward regaining control over your finances and mental health.
There have been several developments in financial assistance and counselling that can help you manage your finances more effectively. Many banks now offer financial assistance programs, encouraging you to reach out early if you can foresee financial difficulties or are already dealing with financial stress.
These programs are designed to provide support before problems escalate, offering solutions such as loan restructuring or temporary relief measures. Or have a chat to our brokers about refinancing your loans including any car loans or personal loans you may have.
Seeking help for your financial issues should not carry stigma. Just as with mental health, addressing financial concerns early and with the right support can prevent more significant problems down the line.
