Have you experienced any of these ‘financial shocks’ over the past year?
By Vicky Shaw,
For many people, the past year has caused a huge range of financial stresses and strains – whether that’s meant constantly checking their bank balance, or lying awake at night worrying about bills, or losing their job.
Just thinking about our finances is enough to make more than half (52%) of us feel anxious, while two in five people (39%) say having a discussion about financial matters can make their heart rate quicken, according to a survey by MoneySuperMarket.com. Three in 10 (30%) meanwhile find the reality of looking at their bank statements an unpleasant experience.
The comparison website, helped by Professor Mark Fenton-O’Creevy – an expert in organisational behaviour – from the Open University, has shone a spotlight on the financial shocks that can potentially cause us the most stress. It’s also pinpointed the money worries most likely to have been bothering people over the past year.
The survey asked 2,000 people to rate how stressful they felt a list of different financial life events would be if they happened to them, on a scale of one to 10, with 10 being the most stressful.
It then averaged the scores out to find out which financial catastrophes the population generally would find the most stressful to deal with.
The top 10 most stressful ‘financial shocks’ were revealed as being unemployed but needing to work to meet bills, followed by having a house repossessed due to failure to meet mortgage payments, and/or being evicted due to failure to meet rent payments.
Next up was being unable to pay the rent or mortgage when it was due, followed by experiencing a major fall in income (such as being made unemployed).
Having possessions seized due to a court order relating to a debt; having a large unplanned bill to meet, and going financially insolvent due to unpaid debts were all ranked equally in the next top spot. This was followed by being unable to meet payments on a debt, and regularly worrying about your own job security.
Thankfully, there is still a broad range of pandemic-related financial support available – which could prevent financial fears turning into reality in many cases.
If you are worried about falling behind on bills, it’s always a good idea to talk to your lender or service provider as soon as possible, to find out what the options might be.
Charities such as StepChange, Citizens Advice and Christians Against Poverty can also offer support.
Sally Francis-Miles from MoneySuperMarket says: “Money worries often cause anxiety and stress, especially in the current pandemic, where entire industries have been forced to shut.
“There is, however, rarely a financial situation that is beyond help, either through tweaks to cut costs, Government support, or from debt help charities.”
MoneySuperMarket’s research also asked people which financial life events they had actually experienced themselves in the past year.
According to the findings, 29% said constantly checking their banking app out of anxiety, as a result of their financial situation, was something they’d experienced. In addition, 29% also said they’d regularly worried about their job security. Meanwhile, 23% had experienced having no savings in case of emergencies; 20% having a large unplanned bill to meet, and worrying about paying for celebrations such as Christmas and children’s birthdays had impacted 20% of respondents.
Worrying about the additional cost while on a day out was something 19% of those surveyed said they’d encountered, while 18% said failing to pay off a credit card in full each month was something that had applied to them, and 18% said they related to not looking at bills, bank statements or credit card statements because of how these things made them feel.
Around 17% admitted to regularly spending more than their income, with 17% also experiencing not being able to afford a break when others were on getaways.
MoneySuperMarket has created a money stress test tool on its website, to help those with worries to get back on track.
Prof Fenton-O’Creevy says: “Reducing financial stress and anxiety is important, because it can take a toll on your mental health. Regaining a sense of control starts with recognising the problem and understanding the steps you need to take get back on track.
“Knowing where to get help, planning and budgeting, and understanding how to cut costs are all important.”
He says understanding how your own attitudes towards money might be getting in the way of reducing financial stress it also important.
“Our survey and previous research shows that people who see money as a source of security and a protection from unexpected events, are less likely to get into financial difficulties than those who see it as about power and status, as a source of freedom, or as a way of expressing love,” Fenton-O’Creevy notes.