Financial stress is a condition that most people experience but do not understand completely. This state of emotional tension or mental strain typically occurs because of dilemmas that root from a person’s financial situation. Consumers experiencing financial stress can have different reactions, depending on the intensity of their concern that relates to their finances. Learning about this circumstance can aid people in understanding how to deal with it and recover quickly.
In-Depth Analysis of the Pressure that Financial Problems Cause
The Australian Government defined financial stress. This discussion is in the research paper released by the government unit, Department of Education, Skills and Employment titled, “Benefits of Educational Attainment: Financial Stress.” According to the study, the terminology financial stress pertains to the hardship of meeting fundamental financial commitments.
The US National Cancer Institute offered synonyms for the stress that financial or economic woes cause. These expressions include:
1. Economic burden
2. Economic hardship
3. Financial burden
4. Financial distress
5. Financial hardship
6. Financial toxicity
The Financial Health Institute is a leading, United States-based personal economics and financial wellness education company. It defined financial stress as a condition that is due to the economic or financial events in a person’s life. The data from the institute pointed out that the pressure that financial dilemmas cause comes with a physiological stress response as well. Also, the Financial Health Institute defined the concept of “chronic financial stress” as the type of mental and emotional strain that is on-going but often intermittent. It is the most common intersection where physical and financial wellness mutually affect.
Common Causes of Money-Induced Stress and Their Impacts
According to the Financial Health Institute, there is widespread proof that a consumer’s financial health can affect his physical wellness and vice versa. The Rocky Mountain Region-based financial education organisation defined financial health as the dynamic link of a person’s economic and financial resources, as he applies them to or it affects his social, physical, and mental health states. Plus, the Financial Health Institute said it is common that, if the state of the financial health of a person decreases, his financial stress increases. Indeed, people beset by financial problems find themselves facing very demanding circumstances. They find their overall physical, mental, and emotional states impacted negatively by their adverse condition.
These six factors are the common causes of financial stress:
1. Shortage of money or cash flow problems due to low income
2. Job loss or unemployment
3. Low educational attainment
4. Low financial literacy
5. Not possessing health or wellness insurance
6. Having considerable costs of medical care that health insurance does not cover
With these detrimental scenarios, disadvantaged consumers struggle from the following 13 common repercussions of their economic or financial problems:
2. Sense of scarcity
3. Undermined psychological well-being, including hopelessness, depression, anxiety, and worry
4. Immense debt due to the inability to afford the payment of bills
6. Impossibility or avoidance of getting medical treatment and medicines
7. Seriously impaired credit
8. Exhaustion of all of one’s bank savings
9. Elimination of discretionary income
10. Wellness problems, including sleeplessness or insomnia, fatigue, and migraines or intense headaches
11. Households deprived of basic living needs due to the inability to pay for household expenses
12. Decreased living standards
13. Inability to raise emergency funds
People from around the globe typically experience the causes of financial stress and their severe impacts. If left unresolved for a long time, these scenarios can create a damaging effect on people’s overall wellness.
Case Study: The United States Where Money Is Major Cause of Stress
Every year, the American Psychological Association (APA) conducts the “Stress in America” poll. The group aims to gauge the perceptions and attitudes to stress among the general public. Also, through the annual survey, the APA targets the identification of the significant causes of stress, the effects of the emotional and mental strain to people’s lives, and the typical behaviours employed in stress management. Since the APA commenced gathering data about the list of stressors that affect Americans, the organisation discovered almost every year that money and work had been the leading causes of stress among the citizens. The 2012 APA survey concluded that 69 per cent of Americans are stressed about money, followed by work at 65 per cent. The US economy ranked third at 61 per cent as among the most frequently mentioned stressors.
In the August 2014 survey, the APA found that 72 per cent of American adults worry about money. They feel stressed about paying rent. Also, these consumers feel bogged down because of debt. Based on the details from the Financial Health Institute, members of the low-income populations are not the only ones that experience financial stress, but up to 75 per cent of Americans. Hence, high financial pressure and poor financial health have caused the people to grapple from plenty of wellness problems. The APA researchers have confirmed that overall health and stress have a strong correlation.
People who experience financial stress typically exhibit the following seven symptoms:
1) Lying awake at night – 42 per cent
2) Anger or irritability – 37 per cent
3) Fatigue – 37 per cent
4) Eating unhealthy foods or overeating – 36 per cent
5) Feeling overwhelmed – 35 per cent
6) Altered sleeping habits – 30 per cent
7) Skipping meals – 27 per cent
The APA also documented well the effects of chronic pressure on the mind and body. Prolonged stress:
1. Inflates the likelihood of maladaptive coping techniques that increase the possibility of future chronic financial stress;
2. Impairs learning ability, cognitive capacity, and memory;
3. Raises the probability of sleep disturbances;
4. Leads to the inability to cope healthfully and the engagement in overeating, unhealthy eating, alcoholism, and drug misuse; and
5. Grows the possibility of suffering from other behaviour-related illnesses, such as obesity, cardiovascular ailments, and adult-onset diabetes.
Indeed, the detrimental condition caused by money problems can result in alarming physical, mental, and emotional wellness concerns. In the United States, researchers believe that with a large number of people suffering from financial stress, it is likely that this condition could lead to a public health crisis.
Learning about the concept of financial stress allows people to understand that such negative emotional and mental state is undoubtedly damaging to human lives. Stress is inevitable because of the volatile events and life changes that affect people daily. These happenings can be both unconstructive and favourable. However, self-studying and research help in financial stress management. By understanding its causes and effects, consumers will be able to comprehend how they can manage their stress levels properly. Above all, they will be able to keep their finances sorted and enjoy long and healthy lives.