How you can manage your mental health in turbulent financial times

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It's almost impossible to ignore the laundry list of financial maladies facing Australians at present.

Inflation is the highest it's been in years and everyday living costs like energy, petrol and groceries are all far dearer than they normally are. At the same time, rising interest rates are also pushing up mortgage repayments for homeowners, while renters are facing record-high prices.

Then there are broader issues like ongoing problems with supply chains, lacklustre wage growth, a housing affordability crisis and even rumblings around the possibility of recession.

how to manage anxiety around money

It's a lot, so it won't come as a surprise that the levels of financial stress and hardship being experienced by Australians are on the rise.

Women, younger people (aged 18-29) and low-income earners, in particular, are experiencing the highest levels of financial stress according to NAB's latest Household Financial Stress Index, with issues such as financing retirement, providing for one's family and medical and healthcare costs proving the major sources of anxiety.

So, given that financial stress is becoming more prevalent and that some of these larger issues aren't likely to disappear overnight, it may a good time to consider some strategies to help maintain your financial wellbeing and mental health. To help out on that front, financial therapist Jane Monica-Jones has shared a few tips.

1. Appreciate that your finances and mental health are interlinked

First of all, Monica-Jones says that it's important to acknowledge that there is a strong relationship between our financial wellbeing and our mental health - though that's not to say that people in a stronger financial position can't experience problems either.

"They are inextricably linked. We know that our financial wellbeing can affect our mental health, so if we're struggling financially that's going to affect our mental health. And our mental health can also impact our financial wellbeing.

"I think the more that we're starting to understand that it makes it better for people, meaning that when we do struggle financially, there's a bit more psychological safety around getting support."

Monica-Jones also pushes back on the idea that emotions can't or shouldn't enter the frame when we're dealing with money. True, we may like to try and remove that element when we invest, but it's also natural to have strong feelings about our finances when it so fundamentally impacts our life.

"We have narratives that we shouldn't be emotional about money, but I like to kill off that concept because money is very emotional because it's an issue to do with survival and thriving."

2. Don't hesitate to switch off and log out

Whether it's doomscrolling through news stories about rising interest rates and livings costs or checking in on your bank balance or investment portfolio too often, negative behaviour can often become compulsive, which is why Monica-Jones says that it's worth striking a balance between staying informed and not adding extra stress to your life.

"When we're looking at something like doomscrolling it's worth bringing in a bit of awareness around it. Does this over-checking escalate my mental health issues and am I feeling more stressed because of this behavior? Is it settling me, or is it escalating me? And can I unplug a little bit?"

If consuming news or checking your accounts is causing you stress then Monica-Jones suggests tackling it with the same strategies as you might use for any type of stress such as exercise, meditation, getting outdoors into nature or connecting with other people.

And addressing that stress is important. Not only for your general wellbeing, Monica-Jones explains, but because it can affect your ability to make clear decisions.

"It's important to understand that when we have large amounts of cortisol, which is the stress hormone, for too long, we can't think straight. We can think for short periods of time, but if we're under extended amounts of stress our cognition goes down, so anything that can support us to feel a little bit more grounded or mindful means that we can make better financial decisions."

3. Keep things in perspective

In the midst of a cycle where the general financial outlook appears to be getting worse, it can be difficult to imagine a time when things start to get better, but Monica-Jones says that it's worth keeping a perspective on it all.

"Besides stress management strategies, the thing that I often like to orientate people to is the fact that we need to be philosophical. Consider that expansion and contraction happen in all things - that there is always the winter and there is always the spring and growth."

Of course, that doesn't mean that you should stop being proactive about managing your bills or continuing to stick to your budget, nor does it mean that all the larger issues in the financial world are going to go away immediately.

"What's important is understanding where you go in contraction or downturn, and I mean that psychologically," says Monica-Jones.

"Do you abandon yourself by getting wobbly or acting recklessly? Or do you regroup with rest and reassess? That time and opportunity to rest is very, very important - it's part of the quality of resilience because we need to rest, and we need to reassess."

4. If you're struggling, get help

The most important point of all is that if you are in a precarious financial situation or you're struggling with your mental health, there are options and people out there to help.

"If you're in financial crisis because you're under a huge amount of debt, or you've been affected by the pandemic or a natural disaster then here is great support available in the form of financial counselling," says Monica-Jones. "It's a free service that anyone can access in Australia."

A financial counsellor will be able assess your situation and help you with managing debt, developing a budget, negotiating with government agencies or creditors, and accessing any grants, concessions or legal support (if you require it) you may be eligible for.

Some of the organisations recommended by ASIC's MoneySmart include the National Debt Helpline (1800 007 007), the Mob Strong Debt Helpline (1800 808 488) and the Small Business Support Line (1800 413 828), or you can use their handy financial counsellor near you tool to find someone in your area.

Alternatively, if you're looking to talk to someone about your mental health then there are plenty of options available to you including Beyond Blue (1300 22 4636), Lifeline (13 11 14) and the Kids Helpline (1800 55 1800), as well as many more organisations and helplines listed by Health Direct.

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Tom Watson is a senior journalist at Money magazine, and one of the hosts of the Friends With Money podcast. He's previously worked as a journalist covering everything from property and consumer banking to financial technology. Tom has a Bachelor of Communication (Journalism) from the University of Technology, Sydney.