Financial Stress Can Have Big Health Consequences

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Back in 2008, at the peak of the financial crisis, the Associated Press and AOL conducted a health poll related to financial stress. According to the findings, people who reported high debt stress had more physical and mental health problems than people with low debt stress. For example, 27 percent of the people with high debt stress reported digestive problems and ulcers while only eight percent of those with low debt stress had similar problems. Also, 29 percent had severe anxiety, compared with just four percent of those with low debt stress.

Kids also suffer when families go through major financial stress. When they experience socioeconomic stressors at a young age, children are more likely to report mental health problems when they become teenagers. It?s time to slash your financial stress, both for yourself and your family. Let?s explore the causes and then discuss how to solve the problem.

Why Is Money So Stressful?

Financial Stress Can Have Big Health Consequences
Financial Stress Can Have Big Health Consequences

When you don?t have enough money, you feel uncertain about taking care of your needs. You also don?t know whether you?ll be okay in the future. This constant worrying can chronically activate your body?s fight-or-flight response, releasing compounds called glucocorticoids into your bloodstream.

Over time, excess blood levels of these compounds can change the structure of your brain. Certain brain regions, including the limbic system, which regulates memory and emotions, actually lose neurons after exposure to chronic stress. Chronic financial stress can spiral into serious depression and anxiety.

Expert nurses who create care plans use a diagnosis called ?powerlessness? for patients who grow ill or infirm and have no control over their care. Before diagnosing a patient with powerlessness, they talk to the patient and the patient?s family about how patients respond to situations out of their control.

In particular, they review patient responses to previous financial stress and job losses earlier in life. If you?re dealing with financial pressures that you can?t fix, your situation matches what someone feels when they become disabled.

How Can You Take Control?

Sometimes, financial stress happens because your money is spinning out of control. You spend too much without saving for the future, and you worry about what could happen to you and your family. Mitch Tuchman, writing for Forbes, suggests five steps for cutting your financial stress in half. These include:

  1. Start an automatic savings plan. It?s hard to look at your income and make yourself set aside money for savings or retirement investing. However, when the money disappears before you get your take-home pay, you hardly notice that it?s gone. Set up payroll deductions for your IRAs, or start having your employer withdraw pre-tax money for your 401k. You?ll be surprised how quickly you adjust to living on less.
  2. Take advantage of employer benefits. If your employer matches 401k contributions, start contributing more so that you can collect more matching funds. Contribute to child care and health savings accounts.
  3. Eliminate debt. Set a timeframe ? how about until the end of the year? ? to get rid of all of your debt, or as much as possible. Refinance your debts if you can, and get serious about paying them down.
  4. Find life?s loose change. Tuchman recommends eliminating spending on things you don?t use, including well-intentioned but unused gym memberships, landlines, and excess cable channels. Then, put the money into things that you truly want or start saving it for the future.
  5. Be content with what you have. Before you spend money on a new toy or gadget, envision yourself in 30 years. Will the future you be happy that you bought surround sound speakers, or would he prefer a more comfortable retirement? Be satisfied with what you have now so that the future you can live without worries. Don?t concern yourself with other people?s shiny purchases. Get more enjoyment out of what you have.

End the Unnatural Attachment to a Certain Lifestyle

Mitch Tuchman touched on this in #5 above, but I think that it needs more emphasis. The stress associated with losing your job or business, or facing a medical disaster are bad enough. Much of the stress associated with these events are beyond your control, which often magnifies the stress.

But much of the financial stress that exists is what we might call voluntary financial stress. ?Voluntary? because the person who is experiencing it has made some bad choices along the way. It may not be an exaggeration to say that such a person is often a hostage to his own desires.

This is often the result when a person is living a lifestyle that cannot be supported on his current income. For example, there may be the emotional attachment to living in a certain type of house, or even in a certain neighborhood or community. The effect of this kind of decision is obvious – he is incurring a high level of financial stress in the constant struggle to maintain a housing situation that is beyond his means.

The same thing can happen if you insist on owning late-model, high-priced cars. You may be carrying a car payment ? as well as other associated costs ? that your income simply can?t support. Vacation homes also fit in this category.

Still for others, the problem is the result of an emotional attachment to living a certain lifestyle. That?s usually accompanied by a high level of spending (defined as spending that is out of proportion to your income). For example, you may insist on having dinners out at The Cheesecake Factory when you can barely afford McDonald?s. Or you may take an annual vacation trip to the Caribbean, when you can?t even afford a trip to a local beach resort.

Maintaining a lifestyle that requires a consistent level of spending that is out of proportion to your income is a stress bomb waiting to blow up. It is far better to ditch that lifestyle in favor of one that you can afford. It will be better for both your health and your finances if you can.

What About Financial Emergencies?

If you?re facing a serious financial stressor, such as a big investment loss or unemployment, follow the expert nurses? advice. If you?re feeling hopeless and powerless, get some support and control what you can.

Seek out support groups for people struggling with job loss, which often meet a local libraries or hospitals. You deserve to know you?re not alone. Also, if you?re facing foreclosure or bankruptcy, let go of the shame. Grieve for the loss, but focus on moving forward.

( Photo by Celestine Chua )

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