How financial stress affects our health

Money concerns can have a big impact on our mental health, writes Emma Mos.

The importance of good mental health has gained prominence over the past few years, particularly since Covid. And with the stress that today’s financial challenges are bringing, maintaining it is paramount.

There’s no doubt businesses are doing it tough. The cost-of-living crisis and high inflation is affecting people’s bottom line and confidence in the economy. The latest research from ASBEO found SMEs are increasingly fearful that they won’t receive money owing to them from failing businesses. It found there has been a 50% increase in requests for help from business owners fearing insolvency. SMEs are also concerned they may not be able to meet their own financial commitments if other businesses don’t meet their monetary obligations.

Cost-of-living crisis feeds fear

This fear is confirmed in research commissioned by CommBank which highlights the additional stress business owners are experiencing as a result of the cost-of-living crisis. The CommBank’s research found 52 per cent of business owners and senior managers felt their mental health had been impacted in the past 12 months by the economic climate. Nearly two-thirds of those surveyed had to deal with unexpected expenses over the past year, totalling $7.3 billion in costs they didn’t see coming.

These concerns feed into poor mental health outcomes, but taking the time to address what’s troubling you can really make a difference. Of course, it’s not just financial pressures that lead to stress when you’re a business owner. There are time pressures as you juggle the tasks associated with running a business, including managing customers, suppliers and staff. But financial challenges are one of the key pressures affecting mental health so it’s important to deal with them as soon as possible.

Research we conducted at Jirsch Sutherland found cash flow and turnover issues to be the leading causes of sleepless nights for business owners. And unfortunately, they’re not likely to go away any time soon thanks to the ongoing cost-of-living crisis and high interest rates. But if addressed early, a wide range of solutions are available to help sort through financial concerns.

Going into insolvency is not a failure

Unfortunately, the thought of being considered a failure in business is one reason why some people avoid seeking early help, especially if they’re concerned insolvency is the only outcome. But if you do find you need to enter into either a business or personal insolvency, it could be the best decision you make. Clearing your debts and starting again can be  good for your mental health as once this financial stress is gone, you can work on a financial plan for the future. Rather than being considered a failure, an insolvency process can be a sensible way to get your life back on track.

At Jirsch Sutherland, we have experienced firsthand the financial stress people go through and how it affects them and their family. This why is our senior team, including partners, principals and senior managers, are accredited Mental Health First Aiders and are trained and equipped to provide support to those facing mental health challenges – in fact, we were the first insolvency organisation in Australia to undertake it.

If you’re struggling financially, and especially if it’s affecting your mental health, it’s important to speak to someone as soon as you can. Finding solutions to financial challenges can go a long way towards restoring a more positive state of mind.

Emma Mos
Partner
Jirsch Sutherland