The Financial Stress of the Coronavirus Pandemic
The fallout of the COVID-19 pandemic has led to an unprecedented financial crisis. According to unemployment data from the U.S. Bureau of Labor Statistics, the U.S. economy lost over 20 million jobs in April, with the unemployment rate spiking to 14.7%, the worst since the Great Depression.
Job loss and financial instability are taking a toll on individuals, businesses and families, particularly because it was an unexpected blow for many. According to a recent survey from the National Endowment for Financial Education (NEFE), the pandemic is causing stress on 9 in 10 Americans. The survey, conducted by The Harris Poll, found that the top 10 financial stressors were:
Having enough in emergency savings
Job security
Income fluctuations
Paying utilities
Paying rent or mortgage
Financial market volatility
Paying down debt/paying off credit card debt
Having enough saved for retirement
Paying healthcare bills
Putting off major financial decisions
As more financial stress mounts, it becomes increasingly difficult to manage your psychological well-being, said Taryn Cooper, MA, Coordinator of Best Practices at Right Track Medical Group. In fact, according to a study published in Clinical Psychology Review, people with debt are three times more likely to have mental health issues, including depression, anxiety and psychotic disorders.
It’s a vicious cycle that goes both ways. For example, mental health challenges may impair financial decisions and self-control. To mitigate and manage the financial stress many of us will feel during this pandemic, Cooper recommends:
Controlling what you can. Part of the stress associated with the financial fallout of COVID-19 is that we are unsure about what will happen next. During these uncertain times, it helps to take control of what you can financially, Cooper said.
“That may include readjusting your budget so that your purchases include only the things you absolutely need, such as food and clothing,” she said.
Maintaining transparency. Acting as if everything is fine will only add to your stress. Instead, talk about your financial challenges openly as a family — and that should include your kids if they are old enough, said Cooper.
“Tell them what’s going on,” she said. “Explain to them that things are tight right now and what mom and dad are doing to handle the situation.”
Reducing the physical symptoms of stress. “The physical symptoms are probably the first thing that most people notice,” Cooper said. “These can include problems like stomach aches, headaches, having a hard time sleeping at night or getting up in the morning, or you notice that your motivation is a little bit lower. This could mean you’re experiencing some mild symptoms of depression as a result of everything that’s going on.”
To reduce these symptoms, Cooper recommends eating a healthy diet, sticking to an exercise plan — even if gyms are closed — and maintaining a regular sleep schedule.
Seeking professional help. According to a National Foundation for Credit Counseling (NFCC) report, most adults surveyed said they would reach out for help if they were in debt or under financial stress. Many non-profit groups are offering free support services during the pandemic, including the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association. Banks have also implemented steps to help customers affected by the pandemic. If you feel as if the financial stress is causing depression or anxiety, Cooper recommends speaking with a medical professional.
Remembering you’re not in it alone. “Many of our patients feel better knowing the government is providing some aid or help and that there are more resources in place for those struggling because of the pandemic,” Cooper said.