Exploring the Impacts of Financial Stress
None of us has been immune to the economic turmoil of the past few years. Spurred by the challenges that have come along with the COVID19 pandemic, more Australians than ever are seeking advice and financial stress management support.
Seeking professional help is always the best way to manage your financial situation. If it’s left unchecked, financial stress can take a toll on your personal health, family life and professional performance. Eventually the strain becomes a self-perpetuating cycle that can be difficult to escape. To make sure you’re seeking advice early on, it’s important to be able to recognise the signs of financial stress. In this article we’ll look into the different ways financial strain can impact your life and how you can manage the situation more effectively.
The Impact of Financial Stress on Health
Personal health is often the first area to see the effects of financial stress. The body’s response to stress differs from person to person, but financial issues often cause extreme reactions. The threat presented by financial struggles – such as an inability to pay bills on time – can cause common effects that include:
- Loss of appetite
- Sleep deprivation
- Tiredness and muscle soreness
- Mood swings
- Withdrawal from friends and family
- Arguing about money
If you’re struggling with financial stress then you aren’t alone. While the symptoms above are normal responses to your situation, they’re behaviours that are often unhelpful. Working towards resolving your financial issues is often the most effective way of managing your stress. If you see any of the signs above, seek help from a financial professional to assess your finances and control your stress.
How Financial Stress Impacts Families
Rising costs of living, a loss of employment or unchecked spending can all take their toll on your family’s financial situation. As the personal effects begin to spill over into your family life, it only becomes more challenging to manage your spending and keep your stress response under control. In most cases families are impacted by financial stress due to things like:
- Difficulty paying bills on time
- Struggling to meet rent or mortgage payments
- Keeping up with your childrens’ school requirements
- Paying for holidays and recreational activities
The most common effect of financial stress is an increase in arguing about money. While that’s a normal response, it simply spreads the stress to your spouse and children, and doesn’t help any of you work towards a solution. If your family is in financial distress then it’s important to work together. You aren’t facing the issue alone, and enlisting the help of your family to manage spending and seek professional help can reduce unhelpful stress responses.
The Effects of Employee Financial Stress on Businesses
It’s not always easy to leave family and personal stress at home. Unfortunately for business owners, that means employees are often coming to work under a cloud. Those financial stresses can lead to a decline in work performance, reduced employee morale and time lost to dealing with personal matters on the clock.
A 2022 study by AMP found that more Australians than ever are reporting that they’re experiencing extreme financial stress. While many respondents reported that they still do their best to work at full capacity regardless, others admitted that it was impacting their work performance. Figures estimate that approximately $66.8 billion is lost to Australian businesses and the economy due to those decreases in productivity. For business owners this means it’s a good idea to stay abreast of employee’s personal and mental health. Offering assistance to struggling employees ensures everyone on your team can work to their full potential without worrying about their own stressors.
Managing Business Financial Stress
Financial stress isn’t limited to individuals – businesses can also experience the same stress. When a business is struggling financially, it can create difficulties in paying wages, meeting ATO requirements, paying suppliers and more. This ultimately creates an environment that’s difficult for the directors to manage without professional financial stress management support.
Financial challenges are a simple fact of doing business and companies of all sizes can be affected. Some of the common causes of business financial stress include:
- Changed market conditions
- Fluctuations in the economy
- Struggles with growing the business
- New competitors
- Alternative products
- A lack of directorial experience
Whatever the case may be, businesses that are seeing the signs of financial difficulty should seek professional help early on. Financial professionals can help your business identify and rectify its issues without the need for drastic actions such as entering Administration or Liquidation. With the right advice and financial plan, your business can navigate its situation and reduce the stress being experienced by directors and employees alike.