Stress due to financial issues is a real concern for Americans. Studies have been done on this topic. It’s actually quite amazing how people can manage this stress over a long period of time. The average person struggles for three years, yup, 36 months, before asking for help or considering bankruptcy. With 78% of American families living paycheck to paycheck, there are a whole lotta people paddling like a duck furiously under the water trying to look like they are smoothly swimming through the waves.
The American Psychological Association (APA) did a study in 2014, just five years ago, that found 72% of Americans felt stress related to finances “occasionally” and 22% felt “extremely stressed” about their finances, that is more than 1 in 5. Fast forward to 2019. The economy is doing better, and the unemployment rate is low, but we are no less stressed about our money. In fact an October 2018 survey revealed that now 52% of respondents reported that they are are “regularly stressed” by finances. We are going the wrong way. And Americans, businesses, and entire communities are suffering.
The obvious effects of financial stress – depression, anxiety, insomnia and headaches- directly affect the physical wellness of each person. It follows that when we are under financial stress, we get sicker. But there is a lot more to this. Americans with financial stress tend to either take action, or “freeze” and don’t take an action, that compounds the financial issues longer into the future. One 2016 study found that 1 in 5 people with financial stress either thought about missing, or actually missed a needed medical appointment because of money concerns. This decision further increases the risk of illness, and potentially the loss of pay from missing days of work. But physical illness isn’t the only effect. People with financial stress are also more prone to skipping work, but not while actually ill. The effects of not sleeping and anxiety can make going to work very difficult. Staying home can mean losing hours, reducing the paycheck and compounding the crisis.
And the effects of financial stress go beyond individuals or families. Businesses are affected by financial stress by both employees, and the business itself. Financial stress can affect productivity and attention at work. Study data, from integration firm Innovu, released in February 2018 reported a, “financially stressed employee” will spend an average of 20 hours a month on financial issues at work. Also, that 70% of workplace accidents are due to distractions caused by stress in the workplace. And a financially stressed business will affect workplace morale due to real concerns about financial insecurity. This insecurity can lead employees to find new jobs, leaving the business short staffed, adding to and perhaps accelerating business reorganization, bankruptcy, or outright failure.
Financial stress also affects whole communities. Neighborhoods that have a large number of residents facing financial insecurity tend to have a higher use of prescription drugs for pain and depression. Financially stressed residents are often in poorer health due to the physical effects of long term stress. Additionally, involvement in community activity tends to decrease in neighborhoods where there is financial distress, and increase where there is a sense of neighborhood financial well being.In fact, financial stress was identified as a top community health concern in an entire midwestern county. Olmsted County, Minnesota is implementing a strategic initiative through 2020 to improve community health.
The impacts to the family, health, work, and community from financial stress are brutal. But there are some steps that anyone can start immediately, these can’t fix anything overnight, but sometimes just knowing where to start can help to reduce stress.
- Take a breath. Admit that you are tired of this, in fact you are Dave Ramsey, “sick and tired of being sick and tired.” And you are deciding now that things are going to change. Read those statistics, you are not alone, and you are not “stupid” or “bad” or whatever term you beat yourself up with when you open the mail. Tell yourself, “I may not know how yet, but I know WHY we are no longer living this way.” And then start to make your plan.
- Get those four walls secured. The right thing to do is to make sure the “four walls” around you and your family are paid for before anybody else gets a cent. Forget the FICO, forget the credit card. When there is food in the house, the utilities and rent or mortgage gets paid, and you have a ride to work, you can fight the rest of the way. If you are hungry, fearing eviction, and not sure if there is going to be water tomorrow, you honestly cannot think about anything else. If you are a small business, determine your “four walls” that must be addressed first or you are unable to bring income to the company
- Get some help. There are a ton of free blogs, articles, and resources online to get you started. You can download my free ebook, “Nine Mistakes to Avoid When You are Having Money Problems” without an email address or any other personal information. Then ask people to help you. Your work may have a wellness program with resources. Your church or local Ramsey Preferred Coach may host Financial Peace University Course. Consider working with a financial coach to help you get organized, get a plan, and walk with you. You don’t have to go it alone, but you must have the courage to share your situation with someone else.
- Know Your Rights. Know that nobody, no company, no creditor, no bank, NOBODY, has the right to abuse you, harass you, call you at work, and threaten to sue you if they really aren’t getting ready to file. They can call, yes, but you do not have to be belittled, shamed, or guilted into making payments, even if you owe the money. Call a consumer advocate or lawyer.