Suffering from financial anxiety?
Here's some tips to help manage it.
BPAY Group Collaborative Media & Publishing
Linda the 'lollipop lady' experienced an anxiety attack when her rent bounced.
"It was awful. I went into full panic mode. My chest tightened up. I was sweating, blurred vision – the lot," the 58-year-old says.
Linda had set up a new direct debit to pay the rent at her caravan park home.
"There was a problem with my Centrelink payment as I had moved to a different traffic crossing, and just like that, I was behind again. 'Here comes the sleepless nights,' I thought."
It wasn't the first time Linda had experienced financial anxiety.
"Sometimes, when I think about money, all of my problems come at once – overwhelming me. I think it's better sometimes to sweep it under the rug and avoid the problem altogether."
Linda is one of thousands of Australians who are experiencing financial anxiety, according to Financial Therapist Jane Monica-Jones.
"I work with people across a very broad spectrum of different lifestyles, different life stages, as well as income amounts, and everyone has stress of some form," she says.
"It's such a challenging subject for so many people – and it's more than just numbers. It has lots to do with issues of confidence and empowerment, as well as habit formation and a whole lot of things."
Around one-third of Australians strongly agree that finances control their lives, while one-quarter struggle to enjoy life because of how they manage money, according to the NAB Financial Anxiety Index.
People aged 18-29 have become more anxious, largely driven by concerns over credit card repayments, and their ability to raise $2000 in an emergency and monthly household bills, the research shows1.
"This stress can spill into other aspects of life, compounding other problems," says Monica-Jones.
"Stress is terrible for your health. Long term stress on the body reduces our immune system. If we're not getting enough sleep because of stress, it affects our ability to cope and think clearly… It can even affect eating patterns and our mood."
Direct debit may not lead to full control
Monica-Jones says that while, in some cases, setting up direct debit can help in the short term, it may not always give the level of control needed.
"Sometimes you're charged more than what you're aware of, and before you know it, you've paid more for your phone or electricity bill than you expected," she says.
"The more financial efficacy and responsibility we feel, the more our financial muscle gets built and the better off we'll be. With the set-and-forget model, we are not as much in control over our finances, and that muscle can begin to atrophy."
Switching bill payments from direct debit to BPAY may help regain financial autonomy.
"I will never use direct debit for a bill again," Linda says. "I previously had used it for just recurring payments like rent or my car loan, but even then, something can happen and then you're behind. And I can't afford to be in that position."
Another common trait Linda displayed was avoidance behaviour – ignoring your bank account or just not dealing with financial issues.
Monica-Jones says this can cause finances to quickly spiral out of control.
"My practice is to find whatever is causing you pain and then look for what you want to improve. A pain point in your relationship with money is actually, at its heart, a great place for self-growth and self-development."
Innovative technology set to play a role
Some FinTechs are creating innovative solutions that also help tackle the issue.
Research by social payments app Beem It found young people experienced unnecessary anxiety around paying bills, primarily driven by a lack of certainty in the payment process.
The eftpos-owned Beem It used BPAY's API suite to easily incorporate BPAY into its service in a way that allayed common bill-paying worries.
“Using the BPAY APIs, we were able to enhance the bill payment experience to instil confidence in our customers," Divya Sivakumar, Beem It’s Head of Strategy and Partnerships, says.
"Even with what may be perceived to be minor enhancements, like incorporating a little check mark to show the Customer Reference Number [CRN] matches the Biller Code, we’re able to provide moments of reassurance throughout the journey.”
Beem It also allows customers to search billers by name to reduce both room for error and time spent entering biller codes manually.
“We also call out a specific date for the payment to be considered as received by the biller. Through a simple calculation, we’re able to increase transparency for our customers, giving them control and confidence over their bill payments,” she says.
Sivakumar says Beem It's research found control was also particularly important for younger people.
“The most convenient way to pay would be just to have it direct debited from your account and not think about it at all," she says. "But there's a reason people aren't doing that and instead are using services like BPAY, because they want greater control over their finances.
“They want to be able to check that they have enough money in their account and know the date that it's going to be deducted, while also making sure that they agree with the amount that's being paid,” she says.
Don't ignore the underlying issues
Monica-Jones says breathing and mindfulness techniques, such as meditating or practising yoga, are some of the best ways to manage financial anxiety.
"If you are experiencing anxiety in the moment, just breathe. Closing your eyes and taking three deep breaths is the best thing you can do."
Other general changes can also help achieve a more structured lifestyle that will help manage anxiety.
"Get off your phone at night. Research shows that spending too much time on our phones just before we sleep disrupts sleeping patterns. Eating right and regular exercise also helps a great deal."
Improving financial literacy through education, such as the government's Moneysmart website, can also help.
"In Australia, financial wellbeing is becoming a bigger issue, and we're seeing that a lot of us don't get the kind of knowledge or certain guidance that we need about our finances.”
., Strickland, T., & Attrill, R. (2021). NAB Australian Wellbeing Report: Q4 2020 (Part 2: Financial Wellbeing) | Business Research and Insights. Retrieved 5 July 2021, from https://business.nab.com.au/nab-australian-wellbeing-report-q4-2020-part-2-financial-wellbeing-45139/
Ms Monica-Jones was not paid for her opinions.