Financial stress: what it is, how to identify and overcome the problem

Two out of three Brazilians suffer from some form of tiredness caused by money-related problems. We need to start looking at these issues as soon as possible.

Have you ever felt insecure about your money? Or even a little stronger fear of what the next years, months and days will be like? Know that you are not alone. (quite the contrary)! In 2020, incidentally, a survey carried out by the Locomotiva Institute at the request of Xpeed (XP Inc's financial education and business school), showed that two out of three people in Brazil feel some kind of tiredness caused by financial concerns. 

Of the Brazilians who responded to the survey at the time, 46% said they frequently had anxiety about their financial situation, while 47% said they felt insecure in dealing with information received from financial services. A concern that used to be much more associated with men, today affects women in very similar proportions.

Far beyond an intangible and figurative insecurity, these numbers have very precise implications in the daily lives of these Brazilians. The research concluded that fear led 21% of people to avoid opening bank statements and 39% to postpone financial decisions for fear of facing the budget.

And make no mistake: these bad feelings about finance didn't just stay there in 2020. In April of this year, surveys by the company GfK and NielsenlQ point out that 86% of Brazilians are cautious about the economic future. The number alone is already large, but, putting it even more into perspective, this value gives Brazil an economic caution 45% higher than the world average.

Ufa! The numbers do not deny that the concern with finances is something latent in the Brazilian routine. It is so present, in fact, that it has even received some names, such as “financial stress” and “financial phobia”. And, like any kind of overload, when that pressure starts to become too high a weight, you have to keep an eye out! After all, like other psychological issues, this financial stress also impacts daily routine and health (physical and mental) of those who feel it.

But, after all, how can this situation be improved in the face of the not-so-favorable economic reality across – or much of – the world (especially after the covid-19 pandemic)?

We cannot fall into the common sense and irresponsibility of saying that the right thing is to try to “relax” and “think less” about it. It is necessary to think – whenever possible and healthy – about financial planning and the future ahead. But, like everything else in life, the secret is knowing how to balance and when to stop and take a breath.

Symptoms of financial stress in your routine

The first step to understand if financial worries are actually becoming a problem in your day-to-day life is to look at the negative symptoms that it may arise. As well as a physical illness, which can bring fever, pain and any other symptoms, psychological problems such as financial phobia can bring symptoms as much as they are visible.

For starters, it can damage your self-esteem, make you emphasize your imperfections, and bring on a constant feeling of hopelessness. When this stress reaches a more severe level, it can take a toll on your body, mind, and social life.

Some symptoms of financial stress are:

● Insomnia or trouble sleeping

● Unusual weight loss or gain

● Depression

● Anxiety

● Difficulty relating to people

● Social distancing, avoiding crowded places or even casual encounters with few friends

● Physical pain, such as headaches, gastric problems, diabetes, high blood pressure, among others

The problem can become a vicious cycle

A big issue with financial stress is that, if not watched carefully and handled with care, it can lead to a vicious cycle.

After all, you start to feel bad because of financial problems (whether due to lack of money or insecurity about the future). From then on, some of the symptoms mentioned above arise. With these symptoms appearing, it's natural for your professional income to drop and you have difficulty organizing your financial life, simply because you don't feel well enough to do so. This change, in turn, can lead to more financial problems, which exacerbate stress and increase symptoms. And so on.

But not everything is lost. If you are part of the large number of women who, to some degree, identify with these problems and symptoms, the good thing is that you can break this cycle (without spending a lot). The first step you may have already taken when you got here: understand the problem and assume that it also happens to you. From there, it is actively seeking solutions.

How to 'pop' the financial stress bubble and solve this problem

If you identified with the problem in any way, it's time to try to solve it. Here are some steps to help you:

1. Converse!

Like any and all psychological problems, the first step is always to seek help by talking and putting out everything that is happening inside. When we talk about problems related to money, it is very common, especially among women, for a movement to simply not talk about what is happening.

That's because we were taught to see financial problems as a failure in life in general and, for every human being, assuming failures is not an easy task. In addition, in the case of women, there is another aggravating factor, which is the simple fact that we have never been used to talking about money with friends. This habit needs to change and it all starts with a simple attempt.

The first step to take the courage to open up and talk about the problems you've been facing in relation to finances is to base yourself on the numbers quoted at the beginning of this article. You are not alone. Quite the contrary: the data shows that the vast majority of people face similar problems, they just don't talk about them.

And that feeling can be a huge relief. Have you ever stopped to think that, perhaps, when you start venting like that with a friend or family member, that person can take advantage of the hook to tell you what they've been going through too? Maybe one can bring possible solutions to the other's problem, but they don't do it for pure lack of dialogue.

And, of course, talking to your wheel is a first step. If the problem continues to get worse and you see the need, seeking therapeutic help to find solutions to psychological issues is always recommended. And the good thing is that today you don't have to spend a lot to get it, after all, there are a number of governmental and non-governmental projects that offer this type of treatment for free or at affordable prices.

2. Take a practical look at your finances

Trying to put the problem at the tip of the pencil is also an essential tip to start dealing with it and, in many cases, calm down. Usually, issues like financial stress are linked to anxiety, as the biggest fear is about the future or how far you would hold out with the finances you have now.

If you are dealing with financial problems, you might think that the easiest way to deal with it is to simply stop opening statements, looking at accounts and seeing how much you owe. That path, however, will only make things worse in the long run. Therefore, the first plan to solve your financial problem is to detail your income, debts and expenses over at least one month.

The best way to do this is up to you: you can use applications that help you organize your accounts in the classic notebook with printed statements. Whichever way you choose, taking inventory of your finances will help you get a clearer idea of ​​where you stand.

And as daunting as that may sound, organizing bills and earnings this way can help you find a sense of control over your situation. This list should contain:

● All your sources of income;

● ALL your expenses – from a cup of coffee in the morning to groceries;

● Your debts at the moment and the term to pay them;

With this in hand, it is possible to have a clearer view and see where spending cuts can be made with impulses or futile things, in addition to identifying possible triggers that make you buy more or receive less.

3. Make a plan and stick to it

After analyzing your financial life and understanding psychological problems, it's time to change in practice! Try to establish a plan to better deal with the situation and stick to it.

This plan can be different and specific to each situation: you can seek to reduce expenses, find effective and possible ways to increase income at the moment, or create a combo with both, all depending on your financial reality at the moment.

Although it differs from person to person, you can create your plan by following these steps:

1 – Identifying your financial problem and why it appears.

2 – Develop a possible solution with the problem at hand

3 – With the idea on paper, put the plan into action

4 – Frequently monitor how the plan is progressing and the results it is bringing.

4. Create a monthly budget

Now that you've managed to find ways to resolve the issue in the moment, you need to look to the future to avoid getting into that situation again. To do this, keep a monthly budget plan, trying, whenever possible, to save a little money for the coming months.

Looking carefully and appreciatively at finances on a monthly basis is essential to understand how much you can spend, always trying to think about possible problems that may appear in the future.

5. Keep an eye on your mental health

Far beyond a money-related problem, financial stress is also a mental health issue. So remember to always keep an eye on your self-care and find ways to deal with that stress. You don't have to wait for the next crisis to look back at your mental health. Quite the contrary, it is essential to make this a daily and basic care, to better deal with the issues that may arise.