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Financial Stress and How to Manage it

Updated: Oct 26, 2022

With rapidly escalating food costs, sky high fuel prices, and interest rates reaching new highs, we are all feeling the pinch of the current cost of living crisis. However, for some, this is more than the need to tighten the belt a little. For some, there is a real stress as to how on earth to survive the coming months and years.



Financial stress is the emotional tension specifically related to money. Most people will have concerns about income versus outgoings from time to time, or how they can secure their future. However, financial stress is when our financial situation becomes our central focus impacting our day to day life.


When financial stress continues beyond a few weeks it can have negative effects on our mental and physical health. Our relationships are impacted, our performance at work may deteriorate due to a shift in focus, potentially further exacerbating the stress, and our overall wellbeing suffers. A review of 40 studies found a positive association between financial stress and depression (1). It can also lead to anxiety, behavioural changes such as withdrawal from social activities, and unhealthy coping mechanisms such as drinking, over-eating, gambling etc.


We can probably identify in ourselves when we are suffering from financial stress;


· Are you always thinking about money?

· Do you find it hard or impossible to make ends meet each week or month?

· Do you have no idea how you would cope if something happened and you couldn’t work for a period of time?

· Do you feel there is absolutely no way out of the financial crisis you feel you are in at the moment?


Whilst we cannot promise you a pot of gold or a quick fix, what we can do is share our tips on how to put in place some strategies to help manage the situation. We can help you regain some control of your financial situation, which may be just enough for you to get your head above water, and start swimming again.


1. Acknowledge our financial situation – the first step to doing something about a situation is acknowledging there is a problem. Fronting up to ourselves, our friends, family, employer and our bank is the first step. Friends and family can help by supporting us, not encouraging us to do activities which cost money, and be our accountability partner to help us focus on what we can do. Our employer can have an understanding of the stress we are under and take that into account with our work load. Our bank can actually help provide support and advice for us.


2. Write down our spending – understand where all our money is going. Whilst this can seem daunting it can help identify how much we are spending each week, what is critical and areas where we can reduce or eliminate spending.


3. Reduce and eliminate – once we have our outgoings written down in front of us we can then go through and see what we can reduce. Could we find a cheaper broadband or mobile option? Switch utility suppliers? Change our car insurance? Identify what we can eliminate. How much do we spend on coffee each week? Or takeaways? Or shopping? Ask ourselves is it really an essential? Can we do without it to ease the financial tension? We may find a gym membership we no longer use, or perhaps we have subscriptions for Netflix, Stan and Neon – do we need all three or even one? TVNZ and Three have free on-demand services, whilst they may not be the most current they are entertainment and they do not cost a cent.


4. Write a budget – now we know what we are spending, what is critical and what is perhaps ‘a nice to have’ we can write a budget. Be realistic in what we set the budgets at, making them too tight adds to the financial stress if we are going over each month, but making them too lenient won’t help in curbing the extra spending. Also ensure to include a budget for small things that we do enjoy – maybe it is a coffee out, budget for one or two coffees out per week. That way we give ourselves permission to have them, in moderation, and they become something we look forward to and savour. Just be careful how many of those ‘nice to haves’ you include - there is a big difference between $10 on coffee, and $100s on takeaway food or alcohol.


5. How to have fun without spending money – life is supposed to be fun, and whilst there maybe times we need to curb the spending, we can still find fun without it costing anything. Write down some ways we can find some joy in our days without spending any money. Maybe it’s having a games night at home with friends, taking the kids to the park for treasure hunt we set up, exploring our neighbourhood for a walk or path we haven’t been on, using what we do have at home – if we have bikes go for a bike ride, craft supplies to get creative (Christmas is coming and some homemade gifts are a great thrifty way to show someone we love them). If we want to keep fit but have had to let our gym membership go – head out for a run or do an at home bodyweight workout, there are plenty of free options on YouTube.


6. Look after ourselves – whilst it can feel like we need to put ourselves on the backburner when we are going through financial hardship, this can actually make things worse. We cannot neglect ourselves, no matter how hard life gets. Our mental health is our responsibility. We owe it to ourselves, and to those we love, to look after ourselves so we can be the best person we can be in this period in our life. Make time to relax. This doesn’t, and shouldn’t cost anything other than our time. Go for a walk without our phone. Read a book (from the library). Cook a healthy dinner (shop in season, buy frozen veg). Play with the kids or a pet (or a friends pet). Meditate. Stretch. All cost nothing but a little bit of time. All pay back in untold wealth to ourselves and our loved ones.


There are some great apps which can help manage our finances. PocketSmith is a great Kiwi owned one which helps set budgets and track spending. It allows us to see how we going with our budget in real time, and how we are tracking across the months. There is a free version of the app available.


These steps will help you regain some control in a time when we perhaps feel like everything is out of our control. Whilst they may not fix the situation, they should bring more clarity, allowing us find our path forwards.


What one small thing can you do today to gain a little more control over your financial stress?


If your workplace could benefit from a Financial Wellbeing workshop, please get in touch!






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