Understanding Financial Stress and Its Impact on Health
Are you experiencing sleep issues, anxiety, or depression due to struggling to cover basic expenses and mounting debts? You might be dealing with financial stress.
According to Erika Villavicencio-Ayub, a researcher in Mental Health and Strategic HR Management at UNAM and LATAM Director for DserOrganizacional Consultancy, financial stress not only impacts your finances but also your physical, mental, and social well-being.
The National Financial Health Survey (ENSAFI) reveals that at least 35% of Mexicans aged 18 and over have experienced physical discomfort caused by financial stress.
The Social Impact of Financial Stress
Erika Villavicencio emphasizes that financial stress is not a minor issue; its significance lies in its potential to affect people’s quality of life and even their existence.
She explains that someone experiencing financial stress often feels a persistent sense of dissatisfaction. Moreover, it generates tension in personal relationships with family members and other areas of their life. It also hampers concentration and decision-making, negatively impacting work, academic, or any performance area.
The combination of these impacts—health, relationships, and performance—creates a “snowball effect” or a “vicious cycle,” where one problem exacerbates another. For instance, increased depression can worsen sleep disorders, and vice versa, as per the expert.
Insufficient Income and Debts: The Main Challenges for Mexicans
ENSAFI reveals that 88% of the population with monthly incomes of up to two minimum wages had to take on debt to cover their expenses, indicating that their earnings were insufficient.
Regarding funding sources, four out of ten individuals sought help from relatives and friends, while 10% used credit cards or applied for loans from financial institutions or departmental cards.
However, debt also stems from more psychological factors, such as social comparison in the era of social media, says Erika Villavicencio-Ayub.
“Many people aspire to a different lifestyle, but unfortunately, they can’t afford it, which increases financial pressure,” she explains in an interview.
This social comparison is more evident with social media. “The core issue is the lack of financial education; without basic knowledge on self-management and decision-making, it becomes a ticking time bomb,” she adds.
She points out that humans react quite primitively to the various stimuli advertising puts in front of people, leading to constant spending.
Strategies to Combat Financial Stress
In light of this situation, Erika Villavicencio recommends adopting a set of strategies and habits backed by behavioral economics and human sciences.
This approach should be comprehensive, she insists, including psychological support that enables individuals to understand spending patterns and foster healthy financial management.
Additionally, returning to basic habits like creating a realistic and detailed budget to control expenses contributes to reducing anxiety by making more rational decisions and knowing where money goes.
Another basic is reducing debts, a significant source of this financial stress. You can negotiate with creditors, avoid debts accruing more interest, and refrain from using one credit card to pay off another debt.
The lack of sufficient income is the root of the debt problem. Therefore, Erika Villavicencio-Ayub recommends finding ways to earn more without compromising the primary income source, thus avoiding another stressor.
She stresses that understanding and addressing the topic of financial health is so crucial that it could save a person’s life, given the high suicide rates linked to extreme debt and financial stress levels.
Key Questions and Answers
- What is financial stress? Financial stress refers to the anxiety, worry, and dissatisfaction caused by insufficient income and mounting debts.
- How does financial stress affect health? Financial stress negatively impacts both mental and physical well-being, leading to sleep issues, anxiety, depression, and other health problems.
- What are the social impacts of financial stress? Financial stress can strain personal relationships, create work performance issues, and contribute to a vicious cycle of worsening mental health.
- What are the main financial challenges for Mexicans? Insufficient income and high debt levels are the primary financial challenges faced by many Mexicans.
- How can financial stress be managed? Adopting strategies like creating a realistic budget, reducing debts, and seeking psychological support can help manage financial stress.
