Financial stress can have a significant psychological impact on individuals and families.
This means that our participants are experiencing more than just a tightening of their budget, but one or more of the psychological results of this financial strain. When people face financial difficulties, such as overwhelming debt, job loss, or insufficient income to meet basic needs, they often experience a range of negative emotions and psychological challenges.
Psychological & Physical Effects of Financial Stress
Here are some ways in which financial stress affects people psychologically (and physically!):
1. Anxiety and worry: Financial stress can lead to persistent anxiety and worry about money-related issues. Individuals may constantly fear not being able to pay bills, falling deeper into debt, or losing their homes or livelihoods. This chronic worry can have a detrimental effect on mental health and overall well-being.
2. Depression: The constant strain of financial stress can contribute to the development or exacerbation of depression. Feelings of hopelessness, helplessness, and despair may arise as individuals struggle to find a way out of their financial difficulties.
3. Relationship problems: Financial stress can strain relationships, leading to conflicts, arguments, and a breakdown in communication. Money-related issues often rank high among the causes of marital problems and divorces. The stress can also extend to other family members, impacting their well-being and dynamics.
4. Reduced self-esteem: Financial stress can erode an individual’s self-esteem and self-worth. The inability to meet financial obligations or provide for oneself or one’s family may lead to feelings of failure and inadequacy.
And…
5. Increased stress levels: Financial stress triggers the release of stress hormones, which can result in chronic stress. This physiological response can have negative effects on both physical and mental health, contributing to a variety of symptoms like headaches, fatigue, and difficulty concentrating.
6. Social isolation: Financial stress may lead individuals to withdraw socially due to shame or embarrassment about their financial situation. This isolation can further exacerbate feelings of loneliness and despair.
7. Health problems: The psychological impact of financial stress can manifest in physical health issues. Chronic stress has been linked to an increased risk of conditions such as high blood pressure, heart disease, and weakened immune function.
8. Job loss or lack of upward movement – This one seems like the cause, rather than the result of financial strain, but studies have found that financial stress can negatively impact a person’s ability to do their job well. As a result, a “stressed worker may face a lower chance of being promoted to a higher-salary job and a higher chance of being demoted to a lower-salary job.”
Important Notes
It’s important to note that the psychological impact of financial stress can vary from person to person, and individuals may respond differently depending on their coping mechanisms, support systems, and personal resilience. Seeking support from friends, family, or professionals such as financial counselors or therapists can be beneficial in managing the psychological impact of financial stress. That is where our financial counselors play a vital role to our program. They meet with each family unit every 6 months and are available when things come up and someone needs to talk through their financial situation.
At BCS we aren’t just putting a band-aid on the problem with providing food. Instead we are caring for our participants holistically by relieving the impact of the financial stress through weekly groceries and providing financial education so that we can give individuals the tools to get out of debt and financial counseling to address some of the mindsets that has led to (or resulted from) financial stress.
If you or someone you know is struggling financially and is ready to work to achieve a healthier financial lifestyle, go to birchcommunityservices.org/join-the-sustainable-families-program.