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Dealing with the stress of debt… and Christmas

20 December 2017

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Money & Life team

Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.

When debt is something you’re already struggling with, spending big at Christmas is the last thing you need. We talked to Financial Mindfulness Founder and CEO, Andrew Fleming about the personal cost of financial stress and how you can take steps to improve your financial wellbeing.

If you’re feeling stressed out by your financial situation, Christmas can be a particularly challenging time. And when anxiety takes hold, you may end up spending even more as a result. Beginning the new year with a mountain of debts to worry about is the last thing you need.

The personal cost of financial stress

The physical and emotional impact of feeling the pinch can be very significant. Few people know this better than Andrew Fleming, Founder & CEO of Financial Mindfulness, a start-up company based in Sydney’s Tyro FinTechHub developing a financial stress reduction program. In July 2017, Andrew and his team commissioned CoreData to survey 1000 Australians on the consequences of financial stress for their health and relationships. They made some remarkable discoveries about just how much financial stress affects how people think, feel and behave.

“The results showed financial stress leads to anti-social behaviour, relationship conflict and breakdown, isolation, sleep loss and symptoms of depression,” says Andrew. “More than 66% of those suffering financial stress said money worries directly led to feelings of fear, anxiety and/or depression – three times higher than people unaffected by financial stress. They’re eight times more likely to have trouble sleeping, four times more likely to argue with their partner about money and more than a third (35.2%) admitted using alcohol or drugs to manage negative feelings associated with personal finances during the past month. These are just a handful of examples of the negative effects financial stress can have on our lives.

The Christmas consumer trap

It’s a time of year that many of us look forward to and enjoy. But Christmas has also become synonymous with spending money and that’s a problem. “The Australian Retailers Association (ARA) and Roy Morgan Research Annual Pre-Christmas Sales Predictions indicate that Australian shoppers will spend more than $50 billion in retail stores from 15 November to 24 December, 2017,” says Andrew. “This is a 2.8% increase on last year. It seems that spending big at Christmas is definitely on the rise.”

The burden this places on our finances can lead to stress and regret, both in the lead up to the festive season and in the New Year when the credit card debts become all too real.  So why do we do it when we have so much more to lose than dollars – including our health, sleep and peace of mind? “The thought of not having enough presents, food or alcohol to go around – especially when we’re the host – can fill us with fear,” says Andrew. “We worry about being embarrassed, or maybe we’re trying to cover up the fact that we’re already struggling financially. Many of us are just trying our best to guarantee a happy holiday for our family and friends.”

This fear of being a poor host, parent or friend can make us very vulnerable to the consumer juggernaut that fires up when the festive season gets underway.  “Retailers understand this fear we’re motivated by and capitalise on it with their pre-Christmas sales,” says Andrew.  “December is generally stressful and you’re time poor as you race to get all your work out of the way in time for the holidays. Combine all of this pressure with the aggressive marketing techniques of retailers and we end up with a lot of impulse buying going on.”

Tips to break the cycle of spending and debt

If you know you’re likely to get caught up in the storm of spending and suffer the consequences later, here are some tips from Andrew to help you break the cycle of buying more than you need – and can afford:

  1. Write a shopping list and stick to it. Don’t be swayed by things on SALE or that particular gift which is not on the list.
  2. Look over bank and credit card statements before you spend money online or at the shops.  A reality check of your financial position before taking any action can help put the brakes on your festive spending.
  3. Now that you know what you really can afford, create a budget to go with your shopping list. If you find that too difficult, at least do #2 before you hit the shops.
  4. Avoid buy now, pay later schemes. They are loaded with fees and charges – if you default just once, you end up paying significant penalty charges.
  5. Try the simple practice of doing a short 10-minute mindfulness meditation with headphones before you go shopping. You can use any one of many apps available and most are free. This process can calm you down in preparation for the very stressful encounter that is Christmas shopping. Parking your car after driving around five times, then battling with crowds and queues can test your nerves. Load up with some mindfulness time and get that resilience happening so you’re less tempted to overspend.

Where to get help

If you’re already feeling anxious or burdened by financial problems or debts, getting help is going to bring you peace of mind. Ignoring money troubles until after Christmas is only going to make things harder, particularly if you run up more debts in the meantime.

Andrew recommends ASIC’s MoneySmart website as an important resource for people experiencing financial problems. Here are a few key topics he’s compiled to help you find the right information for your circumstances.

If you’re struggling with debt, seek help straight away. You’ll have more options if you get advice early.

National Debt Helpline 1800 007 007 

Free legal advice

Other organisations can also provide legal services to help you. Visit National Legal Aid for more information or see free legal advice. 

Crisis support

Call Lifeline‘s 24-hour crisis support service on 13 11 14 or try their crisis support chat service if you need emotional support.

Looking for more ways to spend less and feel better during the festive season? Discover 3 ways to give more without buying at Xmas. Staying at home for the holidays can be a great way to get some financial relief for the festive season. Find out how one couple took a week off at home and had the time of their lives.