MONEY WORRIES
Stressing over money is not just an individual problem – it’s a global issue that can also impact your physical and mental health. MiNDFOOD investigates the causes and impacts of the financial wellness trend.
If you have ever lost sleep because of money worries, then you won’t be surprised that financial stress can have an impact on your health. But the extent to which money and health are linked is becoming more transparent.
A 2020 report from Thriving Wallet, an initiative that explores the relationship between personal finance and wellbeing, found that financial stress has a negative effect on blood pressure, respiratory symptoms, physical health and rates of tension. More recently, a study published in the journal Stress & Health found that financial stress can lead to physical pain up to 30 years later.
It’s not just our physical health, it’s our mental health, too. A report from New Zealand’s Commission for Financial Capability (CFFC) found that 69 per cent of New Zealanders felt concerned about money and that those concerns often manifested as stress, relationship problems, embarrassment and unhealthy eating habits.
Likewise, a 2015 report from the Australian Psychological Society found that money stress is the most
prevalent form of stress. And, according to Relationships Australia, financial issues are among the most common contributors of relationship breakdowns.
Given the scale of the issue, it’s not surprising that financial wellness, the intersection between health and finance, is becoming one of the most important health movements of the year. The Global Wellness Summit’s 2021 Health Trends Report lists financial wellness among the major new trends. It explores our relationship with money and unearths the deeper issues that are negatively affecting that relationship.
“Financial wellness is shifting that conversation from the ‘what’ to the ‘why’, from the pragmatic to the psychological,” the report says.
The ideas behind financial wellness aren’t new – so why has it become such a hot topic? It’s probably not a coincidence that the link between finance and health has become a bigger conversation during a global pandemic – a survey by the Melbourne Institute taken at the start of the pandemic found that three in 10 Australians felt financially stressed over the impact of COVID-19.
Jane Wrightson, Retirement Commissioner and Head of New Zealand’s Commission for Financial Capability, also thinks COVID-19 has thrust financial wellness into the spotlight. “The wave of job loss and income reduction last year threw the fragile nature of our household finances into sharp relief,” she says. “Many working families in bluecollar and ‘pink-collar’ occupations [i.e. those traditionally occupied by women such as teaching and nursing] were hard hit.”
Another factor that is bringing financial wellness into the spotlight is a shift towards considering general wellbeing. “There is a general trend to look at our lives more holistically,” says financial therapist Jane MonicaJones. “Although as humans we have had money issues for time immemorial, we are appreciating more and more how challenges with money can seriously affect our health, relationships, mental health, and self-esteem,” she adds.
The very fact that financial therapists such as Monica-Jones exist shows the extent to which awareness of financial wellness has grown. It’s not just something happening in New Zealand and Australia: The Financial
One in three Kiwis leave unpaid debt on their credit cards each month.
Therapy Association, which is building a community of financial therapy professionals, currently has over 300 international members.
Financial therapists acknowledge that our relationships with money are emotional and psychological.
They help people to unravel their ‘money stories’ in order to better spend, save and invest.
“A ‘Money Story’ is a personal history or narrative about money in our life – it includes experiences, thoughts, feelings, behaviours and beliefs around money. They can be person-centric or generational and are often influenced by culture,” says Monica-Jones.
WE DON’T DISCUSS MONEY
Money has always been an emotionally loaded topic and most of us have been taught that openly discussing money is a bit of a taboo. Monica-Jones notes that cultural attitudes towards money often mean that we don’t seek support or guidance around money. “Not speaking about money in open and frank ways isolates many of us,” she says. “It can be the source of abuse and has created a culture of secrecy where pay gaps and financial inequality can thrive.”
Of all the emotions that are linked to money, shame is the most potent. “There is an evolutionary reason for shame,” explains MonicaJones. “Shame is a psychological mechanism that was developed to trigger the individual to conform to the ways of the tribe. So, if we believe we are not conforming to the general norms of the tribe and money, such as the amount we should have, our level of competency in managing it or how we should be earning it, we may experience a sense of shame.”
Shame is a double-edged sword
– it can prevent individuals from seeking financial advice and at the same time it is bad news for our mental health, self-esteem, self-worth and self-respect. “These are immensely powerful and painful emotions,” says Monica-Jones.
Many of us inherit our attitude towards money from our parents. Monica-Jones notes that there has been a lot of research into the impacts of our upbringing on how we relate to and manage money.
“What was modelled in the home growing up will be either replicated or similar, or rebelled against,” she says. “Meaning that if our parents or caregivers were not so great at earning or managing money, we will do the same or become superproficient at it.”
The cultural silence around money means that there are vast sections of the population who are not practising basic money management. A 2018 study commissioned by UBank found that an alarming 86 per cent of Australians do not know how much their monthly household expenses are costing them. The same study found that only one in five feel they are in full control of their finances.
These statistics are a worry to Glen James, host of the hugely popular My Millennial Money podcast. “When I was a financial adviser, I was having the same chats with clients who were 20 years old or 50 or 60 years old about getting their spending under control – it was common of all individuals to not understand basic money management concepts,” he says.
James notes that becoming ‘financially unwell’ isn’t something that happens overnight. “Financial messes are created with a death of 1,000 cuts – small, unchecked money decisions that build and build. By changing your money habits and behaviours you can and will prevent issues and stress in the future.”
It’s clear that there is an urgent need for financial literacy. But who is responsible for delivering it? James thinks we all have a role to play. “It would be great to see more education for young people around money management, too – a lot of bad money decisions would be prevented with better education on this,” he says.
FINANCIAL LITERACY
Jane Wrightson from the CFFC is emphatic when she says that we should be teaching kids about money management: “Research shows that
“NOT SPEAKING ABOUT MONEY IN OPEN WAYS ISOLATES MANY OF US.”
JANE MONICA-JONES
16- to 24-year-olds are vulnerable to falling into debt that can hold them back.” This can happen through early access to credit cards, high-cost loans, online shopping and gaming. “More than 80 per cent of school leavers told the CFFC that they wished they had learned more about money at school,” says Wrightson.
To help combat this, the CFFC’s Sorted in Schools programme is now active in 62 per cent of secondary schools and kura. “Our learning packages give students the knowhow to start their financial journey on the right foot and make good decisions around money. Financial capability is an essential life skill – the earlier people become good with money the better they will fare throughout their lives,” says Wrightson.
In Australia, financial literacy is incorporated into the curriculum from foundation to Year 10 and is delivered through mathematics, humanities, social science, economics and business. However, since the COVID-19 pandemic hit, there have been calls for personal finance to become a standalone subject. Speaking to the ABC, Financial Basics Foundation Chair Brigid Leishman said that financial literacy is a critical life skill. “It’s about knowing how to manage your money, spending, saving, investing, making good decisions. We know that some schools currently have it built into the economics or business subjects, but it isn’t standalone and it’s not compulsory,” she said.
While school is one way to deliver financial literacy lessons to the next generation, it’s not the only path. In 2020, Nintendo’s popular video game, Animal Crossing: New Horizons, for example, the game’s ‘Bank of Nook’ slashed interest rates from 0.5 per cent to .05 per cent to reflect real-life lending conditions.
PERSONAL AND BUSINESS COSTS
Teaching financial literacy in schools could dramatically improve financial wellness in the future. But what about the huge swathes of the population who are struggling with it now? One option is for employers to do more.
“The old saying about leaving your personal life at the door when you go to work has got to be one of the most outdated and naive concepts ever to have circulated. I think these days most employers understand this,” says Angela Vale, CEO of NZ’s Footprint Connect, a digital platform that aims to improve the financial wellness of employees. Vale notes that our most basic needs are intrinsically linked to financial wellness – if those needs are not being met or if we’re fearful they may not be met, we go into survival mode. “If we are operating on a day-to-day basis concerned about our most basic needs, then that can have a massive impact in our workplaces. Absenteeism, sickness, reduced productivity, poor customer experience, low quality, reduced morale, lack of collaboration and much more. These things don’t just impact the person who is struggling; it impacts their team, customers and others in the organisation.”
The cost of a lack of financial wellness to business then is significant. Which is why more employers are increasingly looking to include financial wellness in their employee benefits programmes. Vale says that all employers can help change the status quo.
“Helping to improve financial wellness doesn’t have to be all about increasing someone’s pay; it can be about supporting further learning, giving them the information, tools and resources to learn and do more,” she says.
“These things lift confidence and have far-reaching impacts through to other financial decision-making and to the transference of learning through to other family members and into our communities.”
Jane Monica-Jones, who is also author of the financial therapy book The Billionaire Buddha, says that financial literacy should go even further. “I believe we should be teaching economic empowerment, the ability to act on and stick to our financial goals, by improving our attitudes, behaviours, beliefs, and triggers that may thwart or sabotage our financial goals,” she says.
Economic empowerment, Monica-Jones notes, would cultivate psychological resilience – the ability to bounce back from financial shock such as the loss of a job or financial trauma such as divorce, illness or loss. Although explicit financial literacy training is important, it’s also vital that we start to break down the wall of silence that surrounds money.
“Get courageous and speak about your money story and often to those you trust,” suggests Monica-Jones.
The younger generations are already doing this – Instagram’s #debtfreecommunity has garnered more than 1.3 million posts.
“Opening up about our money stories is definitely a good thing,” says Monica-Jones. “Not only for individuals and relationships, but for communities, too.”
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Want some more ideas on how to improve your life? MiNDFOOD looks at small lifestyle tweaks that will have a big affect on your health and wellbeing in 2021, everything from embracing nature to investing in rest. mindfood.com/wellbeing-2021