Financial stress can make people anxious and can make a serious impact on mental health. Due to the rapid increase in the cost of living, financial stress is also increasing and affecting employee well-being. It is very obvious to everyone that financial health and mental health are interconnected to each other, and it is clearly shown that those who are financially insatiable or in debt are more likely to suffer from mental health issues, which are anxiety, stress, depression, and more.
Now, the main question that arises here is how a company can help in improving their employee’s financial well-being. Well, there are so many high-performing companies that are working on strategies to promote employee financial wellness. 79% of large-sized companies and 44% mid-sized companies helping employees in mainating their financial stress.
But how does these companies are supporting their employee and helping them in maintaining financial wellness? Australian Financial Wellness offers workshops, programs related to financial literacy, surveys for financial wellness, etc and helps companies to empower their employees with education for smoother financial journey.
In this blog, we will learn how financial stress affecting employee’s well-being and why is financial literacy is important to maintain a mental health.
Understanding the Cause of Financial Stress
There are so many reasons behind financial stress which can negatively affect an individual’s menta health. One of the primary cause of financial stress is debt, when a person struggles to repay the debt, this type of situation can affect individuals mental health and it can lead to anxiety, feeling shame, and depression. Another situation that may cause the stress is the lack of financial security in an individual’s life, this feeling of being uncertain about future finances may cause anxiety, stress, and can disrupts mental health.
6 Impact of Financial Stress on Employee Well-being
Affected Mental Health
Financial stress and ruined mental health are two friends who always come along. Employees who runs their lives with salaries are always worried about making ends meet, the load of mounting debts along with the fear of job security often contributes in depression and anxiety. Affected mental health can ruin individual’s ability to focus and make decisions in everyday life which ultimately negatively impacts overall well being.
Less Productivity at Workplace
Financial stress affects your ability to focus on work and perform at workplaces. Employees dealing with rough financial situations find it very difficult to focus on tasks or even in their personal lives which contributes to decreased work efficiency. The constant financial worries not just affects an individuals work performance but also affect the overall efficiency of the whole team.
Limited Career Growth Opportunities
Financial stress can majorly affects an employee’s career growth. The overall ruined mental health because of financial situation does not let employee to focus on professional growth opportunities. Employee dealing with financial situations may find it back-breaking to gain new skills or participating in any event which are essential for career growth. Therefore, this restriction can hamper individual’s potential to take step forward in their career journey.
Bad Physical Health
Financial stress does not only affects individual’s mental health but it can ruins one’s physical health too as taking too much stress can cause the release of stress hormone which can lead to increased blood pressure, weight gain or loss, disrupted sleep or less sleep, etc which eventually contributes in a range of various health issues.
Crumbled Interpersonal Relationships
Both personal and professional relations are affected by financial stress, as it can cause disruptions in an individual’s mind and increased tension. The constant mental pressure can cause communication failure and falling-out whihc can negatively impact your workplace relations. Hence, financial stress not only impacts an individual’s well being but also create a negative environment around.
Tips For Addressing Financial Stress
There are various strategies that can be used to manage financial stress and these strategies can also be vary from person to person to improve their mental health. Her are the following tips for addressing financial stress:
Set a budget
Develop a realistic approach to manage your expenses according to your income and saving goals. This technique helps you to get a clear view of your financial situation and will help you make a well-informed financial decisions.
Emergency Funds
An individuals must have savings to cover unexpected expenses, having a financial cushion in those situation can really help you in managing stress and provides a sense of reliability in any unforeseen situations like medical, repair cost, etc.
Financial Literacy or Education
Investment in financial literacy is must nowadays. Having a understanding of some basic financial concept such as investing, savings, or budget enables you to make smart financial decisions.
Seek Professional Advice
Consider taking professional advice for financial wellness. Counselors helps you in create a well managed financial plan according to your income, expense, and saving goals.
Explore Additional Income Source
Always look out for opportunity to double your income source. Additional income can boost your speed to rreach financial goals, a part-time work, freelancing are good examples for additional source of income.
Importance of Financial Literacy
In this inflation era and evolving economic landscape, financial literacy is very important and is a key driver for responsible financial decisions. Nowadays, Financial literacy is an essential part of economic wellbeing and personal empowerment. It helps individuals to make informed financial decisions, manage income sources, navigate expenses smartly, and in reaching realostiv saving goals. Financial wellness is very important for individuals overall economic stability and to maintain good mental state.
It empowers individual’s realistic financial goals and helps to understand debt management, long-term financial goals, investment, and to manage retirement funds. Moreover, having financial education helps in developing confidence, sense of security, and reduce stress, anxiety, and other mental problems.
At Australian Financial Wellness, we are known to extend our expertise to mid and large sized companies who understands the importance of employees financial wellbeing. We provide employees with financial tools and education which helps them to manage their financial goals easily for better mental health and well being.
Let’s encourage companies to take a step forward to financial security for their employees, reach out to us today!