Bonus Episode: Dealing with financial stress

This is the transcript of the bonus mini-episode released on 25 March 2020. Listen or read below.

Hello and welcome to a bonus mini-episode of Let’s Talk About Mental Health, the weekly podcast about improving your mental health and wellbeing. I’m Jeremy Godwin, thank you for joining me.

This episode is going out on Wednesday 25th March 2020, and we are all facing one of the most challenging situations in decades: not only is coronavirus COVID-19 continuing its rapid spread, but the economy is kind-of in the toilet in part because of all the shutdowns. I’m sure many of you have either lost your jobs, had reductions in hours and pay, or know someone who has been affected financially. 

First let me say this: to the millions of people around the world who have lost their jobs, I am truly sorry for what you’re going through. I’ve been through it a few years ago and at the time I thought it was the end of the world, but it wasn’t. So, with that in mind, I’m going to share a few bits of advice for dealing with financial stress while still looking after your mental health.

A quick disclaimer: Any advice and information in this podcast is general only, and has been prepared without taking into account your particular circumstances and needs. I make this point because, in Australia (as I’m sure it is elsewhere), personal financial advice can only be provided by an individual who is licensed to provide advice. Should you require advice about your individual circumstances, please see a qualified professional.

Before we begin, I want to encourage you to focus first on acceptance (especially if you’re still struggling to get past ‘shock’). I firmly believe that the beginning of dealing with all of this is to accept the situation as it is. I’m self-employed, and this week I’m having to make some very hard decisions about changing my focus and my expectations given the situation so many of us are in. It is what it is. Look, feel what you need to feel – grieve if you need to – but don’t get stuck in grief or anger or sorrow. It is what it is. And it’s not personal; you’re not being punished. Things don’t happen to you, they just happen (unknown). The only things you have direct control over are your words, your actions, and your feelings, so accept the situation as it is and deal with it as it is.

With that said, let’s talk about some general advice and tips for dealing with a financial crisis:

  • Assess and Track your spending. Sit down and review your bank statements for the past 6-12 months, and take the time to really understand where your money is going. 
  • Prioritise. Look at your spending and determine what is a luxury, what is nice to have, and what is must have, then prioritise and adapt. Luxuries go first: you will survive without those Gucci loafers (I know, who knew?!). Drop luxuries, then be prepared to drop the ‘nice to have’ things if you need to so you can focus on the must-haves – and I’m talking about basic stuff here, like rent and food and utilities. You need to start from that point first; work from your basic survival requirements and then consider if you can afford to add on a few ‘nice to haves’ like a Netflix subscription. Personally I consider internet access to be an essential, especially with most of us being in lockdown or heading in that direction, but you have to make the choice that is right for you based on the resources you have available. 
  • Make a budget. Be completely clear about what is coming in and what is going out. Whatever your situation, make a budget that calculates your weekly/fortnightly/monthly spend down to the last cent so you know what needs to be paid.
  • Plan. A lot of us (myself included) grew up not having a lot of money, and I distinctly remember the ‘boom and bust’ cycle of having nice stuff to eat just after payday then going a week or two (or longer) surviving on just buttered toast and instant noodles until the next payday. Don’t get into that cycle. Create a plan so you don’t have ups and downs if you can help it, because that will enable you to be more consistent which may reduce the impact of all this uncertainty on your mental health.
  • Make changes (and make tough decisions if you need to). Make changes to your lifestyle based on your financial position. If that means you have to stop shopping for non-essentials, then so be it. If you’re prone to emotional purchasing, stop browsing online stores. If you have to make tough choices, then needs must. Some choices are difficult, but the easy choice isn’t always the right choice.
  • Put money away in a separate account for regular essentials like utilities, petrol, internet, car registration,  etc. and add to it regularly – work out your average monthly/quarterly/annual expenses, divide them by 12 for monthly/26 for fortnightly/52 for weekly and put away that amount religiously in a separate account (please make sure you have fee-free accounts by the way; there is so much choice when it comes to banking and as long as your financial institution is covered by government savings guarantees then there is no justification for paying monthly account-keeping fees, especially when you’re struggling financially). I did this when I was unable to work and it was one of the best things I could have done because I knew the money was there when I needed it for the basics (even though things were very, very tight to make that happen plus pay the rent). If you can, put aside a little extra to treat yourself every now and then (say with a book purchase or a movie rental) because those little things will make a huge difference to your mental health. 
  • Do what you need to do. When I was completely broke and couldn’t find the money for rent, I held a couple of garage sales and sold a bunch of stuff on eBay. I know we can’t exactly have garage sales now, but we can look at what our options are. My point is that you do what you need to do to make ends meet, and if that involves having to let go of some things that you treasured then so be it. It’s just stuff.
  • If you rent, talk to your landlord asap. Let them know your situation and see what options you might have. They may not be willing to work with you to find a solution – but if you don’t ask, you don’t get.
  • Speak to your creditors. Explain your situation, and find out what hardship provisions they have in place. Please do not just go and get a loan or put everything on credit to make ends meet without at least talking to your creditors: I did that, and it made the situation WAY worse, both financially and in terms of my mental health. The best time to talk to your creditors is yesterday; the second-best time is today. 
  • Make financially responsible decisions. Remember that we have no idea how long all this is going to go on for, or how long it will take things to return to some semblance of normality afterwards. The reality is that we could be facing many months or possibly years of economic issues, so don’t make short-sighted decisions (e.g. Don’t use payday loans; the interest on some of those loans is just horrendous, so don’t be tempted to chase a quick fix that will make things worse).
  • Review your living arrangement if you really need to. If you have to downsize or make changes, you might need to move back into the family home or move in with a relative or friend. If you have a spare room, consider renting it out. If you are moving in with friends or relatives, please make sure you have a clear agreement in place about who pays for what (preferably in writing).

Further to those tips, consider these points when it comes to your mental health and dealing with financial stress:

  • Address stress related to financial difficulties. Tackle the situation; don’t just bury your head in the sand. Also, make smart choices and avoid unhealthy coping mechanisms (e.g. Don’t try to drown out your sorrows by getting drunk, it will just make matters worse tomorrow).
  • Prioritise your mental health. If you need to regularly see a professional or if you take medication to deal with mental health issues (or both), make it a priority. Don’t skip these essential actions because you will make things much worse for yourself in the future. Look after your mental health because your health is the most valuable thing you have.
  • Ask for help. Lean on your community, even if it’s just for a mutual shoulder to cry on when you need an outlet. If you have relatives or friends who are able to assist you financially, then the time for holding back because of pride or fear has passed; ask for help if you need it.
  • Finally, take action now. Don’t leave it until the problems get worse or it’s too late to do anything about your situation. Do what you need to do. The best time to act is yesterday; the second-best time to act is today. 

There is absolutely no denying that these are difficult times. The thing about difficulties though is that how we get through them is up to each of us. Regardless of what’s happening in the world around us, we always have the option to choose our response. So what is your choice? Will you give in to fear? Or will you hold on to hope? The future isn’t written, and all you can truly do is focus on today. Do what you can to work through your situation and be as positive as you can, and take things one step at a time, one day at a time.

That’s it for this mini-episode of Let’s Talk About Mental Health – if you found this program useful, please share it with someone you know.

For more advice on improving and maintaining your mental health and wellbeing, check out the weekly Let’s Talk About Mental Health podcast – available on all major platforms including Spotify, Apple Podcasts and Google Podcasts. You can also read each episode’s transcript at the website, which is: letstalkaboutmentalhealth.com.au

New episodes are released weekly – Monday morning in Australia & New Zealand, Sunday evening in the UK & Ireland, and Sunday afternoon in the US & Canada.

Thank you for joining me today – look after yourself and make a conscious effort to share positivity and kindness in the world, because you get back what you put out. Take care and talk to you next time.

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