Financial insecurity leading source of poor mental wellbeing for Australians

Financial insecurity and feeling guilty for spending money are the leading causes of poor mental wellbeing for Australians, new research has found. This is how you can tackle financial anxiety.

Financial insecurity and feeling guilty for spending money are the leading causes of poor mental wellbeing for Australians, new research has found.

Concerns about money ranked higher than stress and anxiety in a major survey of Australians, conducted by New Corp Australia’s Growth Distillery with Medibank.

The survey comes as News Corp launches the Can We Talk? campaign, in partnership with Medibank, to help Australians talk about their mental health and drive more government support.

Money and financial issues were the most cited stress factors in the research, affecting 48 per cent of people.

High levels of stress (46 per cent) and anxiety (41 per cent) were the next biggest factors on mental health.

For Megan “Megs” Freeman, giving birth to her son 10 years ago unmoored her in more ways than one.

Becoming a parent for the first time is one of life’s greatest and all-encompassing transitions, so much so that it often obscures, especially for women, other changes that come alongside it: earning money.

“(My anxiety about money) grew when I became a parent, and stopped actually earning any money so that I could care for my son,” Ms Freeman said.

“I’ve never been materialistic or a big spender, but I didn’t realise just how proud I felt about (having my own income), and the choices and independence it afforded me.”

While her partner has never been anything but supportive, Ms Freeman found herself counting every dollar and conflicted using money that she felt “wasn’t mine to spend”.

“I found things got really disproportionate in my mind … even to own the right to buy myself a coffee while I was out,” she recalled.

Megan Freeman. Picture: Wayne Taylor

It didn’t help that she was also managing household expenses, which meant facing the prospect of spending what she saw as not her money daily.

Over time, her financial anxiety grew, exacerbated by factors such as home ownership, medical bills, and the psychological burden of feeling financially dependent on her partner.

Despite her partner being supportive, the stress was internally driven, affecting her mental health, sense of autonomy and ability to make financial decisions without guilt.

The stress compounded over the years, worsened by her family’s attempts to juggle multiple savings goals while managing everyday expenses – as well as purchasing a house in 2022, just as the financial crisis set in.

“We’ve always been sort of thrifty … but costs all suddenly started adding up, and even DIY home improvements still need decent dollars to complete,” she says.

“We were actually just so stretched that there’d be times where I’d go pay for the groceries and the card would bounce … and the shame in that and then the anxiety every time I’d go and pay, it just felt like a lot.”

Her life echoes that of many Australians, whose mental health has been directly impacted by rising financial insecurity.

Millennials like Ms Freeman, who is in her early 40s, are also grappling with the financial strain of housing and childcare costs, coupled with the challenge of balancing burgeoning careers with family life.

After deciding to set up her own design consultancy practice, Creative in My Pocket, which helps everyday people create enriching homes for themselves, she was finding the process of putting new business quotes together so overwhelming she knew it was time to get help.

Statistics show that life transitions and work related stress affect 12 per cent of millenials, which indicates the generation may be struggling to communicate about societal norms and workplace challenges.

Ms Freeman found her way to financial coach Suzanne Alexander, whose approach to money looks at both the numbers and her clients’ relationship to money.

“Our relationship to money is shaped early in life, with many financial beliefs forming by age seven, and if these beliefs aren’t challenged, they influence decisions well into adulthood,” Ms Alexander said.

She works with a lot of people who are overwhelmed by their financial situation and feel like they are not moving forward and just living pay cheque to pay cheque.

“A lot of the time, they don’t know where they’re at,” Ms Alexander said.

“They don’t know what financial position they’re in, and they actually don’t know what steps to take next.”

While she emphasised that emotions are a big driver behind how we spend our money, she said outside circumstances, such as the cost-of-living crisis, as well as knowing exactly how much money you had coming in and going out were key to getting yourself back on track.

“For those feeling overwhelmed, the first steps to regain control involve tracking expenses, aligning spending with personal values, and reframing negative money beliefs,” she says.

Ms Alexander also works with clients whether cutting back is the best way forward, or whether there is capacity to earn more money – or both.

She also strongly advocates for teaching financial literacy as early as possible, even if it includes just familiarising children with numbers.

“You can take children to the shops and teach them the principles of reading labels, of buying a hot chocolate, baking etc,” she says.

“Whatever you’re doing, just start to use numbers and normalise it, and teach kids that a partner is not going to come and rescue you – we should all have a level of financial independence.”

For Ms Freeman, it took hard work on her mind shift around money and the practicalities of her life that have led to a better understanding of old habits and methods.

Now, she is ready to become a more confident and capable earner, and is experiencing great rewards in her practice.

“As a small consultancy business, there will always be uncertainty in where new business will come from in the future, but I am grateful for the wonderful opportunities I have now and will continue to welcome them going forward,” she says.

Can We Talk? is a News Corp awareness campaign, in partnership with Medibank, helping Australian families better tackle mental wellbeing. To follow the series and access all stories, tips and advice, visit our new Health section.

Originally published as Financial insecurity leading source of poor mental wellbeing for Australians