Have you ever wondered, “Where did all my money go?” and “How should I plan my savings?” and found yourself spiralling into anxiety? Financial stress is a common struggle that can affect anyone, regardless of income level. Constant worry about unexpected expenses or debt can affect your mental well-being. It's important to recognize the signs of financial stress and take proactive steps to manage your finances effectively.
Money problems can significantly impact emotional wellness. According to research,17% of Indians are stressed due to financial instability.
Causes of financial anxiety
Increasing debt: Consistent debt increases can be one of the major causes of financial anxiety. Personal loan growth has spiked to 26% in India for the Financial Year 2024, much higher than credit growth in industry, services, and non-food sectors.
Layoff anxiety: An individual's employment status can influence their financial well-being. Today's job market offers many opportunities and flexibility to explore different career paths, but layoffs and rapid technological advancements require constant upskilling. According to the All India IT & ITeS Employees' Union (AIITEU), around 20,000 tech employees lost their jobs in "silent" layoffs in the IT/ITeSsector in 2023.
Social pressure: Social media browsing can lead to impulse buying, negative attitudes towards money, and unrealistic expectations of wealth and success. Studies have found that Gen Z is highly influenced by conspicuous consumption, driven by their desire to improve self-image and self-esteem. They often fall prey to the Veblen effect: they consider higher-priced goods or limited editions to increase their social status.
Lack of access to cash or credit: Some people feel anxious when they don't have easily accessible cash. This can happen if their money is invested or they have maxed out credit cards or a business line of credit.
All these stressors lead to unhealthy coping mechanisms among the younger generation, such as
- Getting into substance abuse
- Gambling
- Overeating
- Self-harm and thoughts of suicide
Several studies have talked about a vicious cycle of financial health and poor mental health:
- Financial problems negatively affect mental health, as stress from debt or other financial issues can lead to feelings of depression or anxiety.
- Then, poor mental health, in turn, makes managing finances more difficult. There might be a struggle to concentrate or deal with a growing pile of bills; individuals might also lose income by taking time off work due to anxiety or depression.
Here are some healthy coping mechanisms to deal with financial stress:
Talk to someone: When facing financial troubles, seek support from someone you trust. Remember, you're not alone in this.
Get professional help: There are plenty of organisations or online resources for counselling on financial matters, such as managing debt, creating or sticking to a budget, or claiming benefits or financial assistance.
Keep track of your finances: Various websites and apps can help you track your finances moving forward, or you can review receipts and bank statements to assess past spending. Although some financial problems are more accessible, taking stock of your finances provides clarity.
Stick to the plan: Identify your current financial situation and devise a strategy for expenditures, savings, and investments. Stick to the plan, and seek help from close ones or professionals if needed.
Create a monthly budget: Break your income into specific parts or categories and separate a certain amount for savings. Try to remain within your budget each month.
Financial stress is a common concern that affects many individuals. It is important to remember that one is not alone in experiencing this. The key to managing financial stress lies in being mindful of expenses and staying aware of expenditures. With mindfulness and a well-structured strategy, it is possible to overcome financial stress.
Dr. Jini K Gopinath, Chief Psychology Officer, YourDost
Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
MoreLess
First Published:
22 Jul 2024, 12:49 PM IST
Business NewsMoneyPersonal FinanceBreaking the cycle: How to stop money worries from affecting your mental health?
