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Understanding & Managing the Mental Health Impact of Debt

(The Balance) – Money doesn’t just impact your financial well-being. It dictates every facet of your life, from where you live, if you go to college, and whether you can comfortably retire.

According to the Federal Reserve Bank of New York, total household debt increased by $87 billion in the third quarter of 2020, totaling more than $14 trillion. With so much riding on how we can afford basic things like housing and transportation, money is emotional. And we feel that emotion in many of the financial decisions we make.

If you’ve ever felt depressed or anxious about not having enough money to pay bills and afford necessities, you might want to find ways to manage the impact money has on your mental health. Here’s how to notice it and what to do if you experience any of these feelings.

How Debt Weighs on Mental Health

Dr. Alex Melkumian, founder of L.A.-based Financial Psychology Center, said the pandemic has amplified the emotional impact of finances.

“In normal times, financial stress is the most common type of worry amongst Americans,” Melkumian told The Balance in an email. “The pandemic has exponentially amplified the levels of financial anxiety.”

That increased stress was felt early in the pandemic: Almost half of Americans reported they experienced “a lot” of financial stress this past spring, according to a June 2020 survey from Edelman Financial Engines. Furthermore, less than half of respondents said they’d be able to come up with $2,000 in the next 30 days in case of an emergency.

“The feeling of debt is akin to the removal of security and safety, base human needs,” Melkumian said. “When not knowing where the next paycheck or meal is coming from becomes a reality, stress and anxiety start to set in.”

Anxiety

Anxiety is one of the first feelings you might face when it comes to money. If you tend to get stressed when you think about money, being able to afford your bills, or not earning enough, you might suffer from financial anxiety.

“The fear of not being able to pay [the money] back and losing what you have can bring on intense anxiety attacks that are prone to strike at any moment,” Melkumian said. “As one falls deeper into debt or prolongs it through minimum payments, it can become very dark.”

If you feel like you have financial anxiety, it could lead to other mental health concerns like depression and suicide.

Insomnia

Financial stress not only harms your wallet, but it hurts your ability to rest, too. You could be worrying so much about not making ends meet that you’re losing sleep. If you’ve lost your job or face reduced hours, you might stay up at night trying to find solutions to your money problems.

“Insomnia is a very common manifestation of both [anxiety and depression] and is a relatively milder symptom than something like suicidal ideation,” Dr. Georgia Gaveras, chief psychiatrist and co-founder of Talkiatry, told The Balance in an email. “Unfortunately, we have seen successful people who have fallen on extremely difficult financial hardships who have turned to suicide.”

Depression

Financial trouble and depression are a potent mix, according to the U.K.-based Money and Mental Health Policy Institute. The institute’s research has revealed that people with depression and debt are 4.2 times more likely to be depressed a year and a half later than people without financial difficulties.

“While there are typically practical solutions to debt, the emotional toll can be so great that those suffering are unable to address their finances in a logical manner, further exacerbating the stress,” Melkumian said. “One develops an emotional relationship with money which can be marked by highs (payday) and lows (the day after payday) that become cyclical patterns in one’s life.”

Think about what causes your anxiety and depression. Do you constantly look at your bank account and worry that you won’t be able to pay bills? Or do you ignore financial obligations in hopes that they’ll go away? Both of those things can trigger depression and can take a greater toll on your mental health.

Suicidal Thoughts

In Nov. 2020, the American Journal of Epidemiology released a report showing a link between experiencing financial strain and attempting suicide.

“Financial debt and crises, unemployment, lower income, and past homelessness were each significantly and positively associated with subsequent suicide attempts,” the report said. “Predicted probabilities of suicide attempts (and suicidal ideation) increased substantially with each increment in financial strain.”

“There is a story recently of a 20-year-old who died by suicide after seeing a negative balance of over $700,000 [in his] investing app,” Gaveras said. “Studies have shown that debt is a risk factor for suicide and, again, the reverse is true. Those who have had a recent suicide attempt are more likely to have financial problems in the years following.”

Signs Your Debt Is Affecting More Than Your Wallet

Gaveras has a simple way to tell if your finances are starting to harm your mental health.

“When someone comes to me with symptoms of anxiety and trouble sleeping, I ask them what they are thinking about when they are trying to fall asleep,” Gaveras says. “Even if the answer is not specifically about money or debt, sometimes it is something that is indirectly related.”

You may not think money infiltrates other areas of your health, but it does. Melkumian said there are two major ways to know if you’re suffering from the mental health impact of debt.

“The biggest warning sign [is] if you are constantly thinking about your money or never thinking about it,” Melkumian says. “If this behavior is combined with anxiety attacks, it’s fairly easy for someone to connect the dots as to what is causing their anxiety and depression.”

Other warning signs Melkumian shared with The Balance include:

Avoiding money talks: “Because finances are such a taboo topic in our society, one does not get to share what is going on for them financially, so they can get stuck in their own head without anyone to talk to. This builds anxiety, panic attacks, and even suicidal thoughts.”

Changing financial behavior: “Are they spending more with no apparent reason? Are they turning down restaurant invitations? They may be spending big but digging themselves into debt all because of anxiety caused by something like job insecurity.”

Suppressing negative feelings around money: “The cultural narrative of emotional positivity can lead to judgment and shame. It sets an unrealistic expectation that happiness is the most important emotion. When circumstances do not align with positivity or happiness, this leads to a significant decrease in mental health.”

How to Manage the Mental Health Impacts of Debt

If you’re suffering from the emotional toll debt is taking on you and your life, there are ways to manage it.

Get Help

Whether you suffer from financial anxiety or face suicidal thoughts, talking it out with someone might be one of the biggest ways you can help yourself. Both Gaveras and Melkumian recommend seeking out the help you need and finding someone you can talk out your issues and concerns with. This could be with a financial therapist or a different type of specialist that meets your needs.

Reframe Your Approach

Melkumian notes that many people feel shame if they aren’t happy all the time. Try shifting your perspective to be more accepting. “If normally you are telling yourself ‘I should be happier,’ use a reframing technique to shift your perspective: ‘I am willing to face my financial situation as it is, so I can get to a happier place in the future.’”

Create a Plan

Money concerns go well beyond your wallet and deep into your mental health.

“Build a plan for self-care and debt reduction while also working on self-esteem and deconstructing the subconscious blocks that have been in place since you were young,” Melkumian says.

Your financial fears don’t have to overpower your life. If you need more help, talk to a therapist or counselor who can help find a path that’s best for you. Not all specialists are the right fit and if you don’t connect well with one, don’t be discouraged. Instead, look for someone that’s a good fit for your needs. Explore the Financial Therapy Association or search for a professional near you.

***
Authored by Dori Zinn and originally published in The Balance on January 19, 2021.

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Food Banks Are Seeing High Demand Right Now. Here’s How You Can Help

(Forbes) – Among the economic issues laid bare by the ongoing coronavirus pandemic, food insecurity may be the most striking: Aerial photos of pick-up lines at food banks around the country show lines of cars that stretch for miles.

And as many relief programs are set to expire at the end of December, that demand is likely to increase. Access to food was already a major issue in the U.S. before the pandemic—more than 35 million people experienced food insecurity in 2019, according to food bank network Feeding America, a number that the U.S. Department of Agriculture expects to jump to about 54 million in 2020. This month, nearly 15% of households with children reported not having enough to eat, according to a U.S. Census Bureau survey.

If you want to contribute to organizations that work to alleviate hunger in the United States, there are a few factors to keep in mind to ensure that your donation is effective and impactful.

[Want more stories like this in your inbox? Subscribe to the Forbes Advisor Weekly Newsletter.]

Why It’s Better to Give Cash Than Canned Goods

When you think of donating to a food bank or other organization that works to alleviate hunger, you might automatically reach for the nonperishable goods. But your money can do more than a couple of boxes of shelf-stable items can.

Because food banks work with manufacturers and grocers, they can obtain food at far less than the cost you pay at the grocery store. Feeding America says that every dollar donated can help secure and distribute 12 pounds of food—that’s about 10 meals.

But it can feel strange to open your wallet instead of your pantry. Giving a physical food item is a tangible gift, whereas a cash or digital payment feels less personal, said Dr. Alex Melkumian, a psychologist and founder of the Financial Psychology Center.  “We associate our memories of being fed with emotions of love and care and want to provide the same for others, especially during such a tough time,” he says.

Read more: Your Guide To Charitable Giving For The Holidays

That brings up another challenge this year: You might not be struggling to access food, but there’s a good chance you’ve had to rebalance your finances due to the economic effects of the pandemic. How can you make a difference when you’re anxious about getting by yourself?

Melkumian said that worrying that your gift—financial or otherwise—isn’t big enough can send you spiraling into feelings of shame and guilt that prevent you from taking action at all. “Perfection is the enemy of progress,” he said. “Your gift or donation doesn’t have to be big nor does it have to be financial.” Your time, support on social media, and even a smile can contribute to the spirit of giving we want to contribute to at this time of year, he said.

Here are ways you can make a difference, no matter your budget.

Plan a Monthly Donation

It feels natural to donate to your favorite charities at the end of the year, when you’re filled with holiday cheer. Just look at the success of Giving Tuesday: Nearly $2.5 billion was donated to various organizations in the United States this year, a 25% increase over last year.

And although nonprofits of all sizes are surely grateful for those donations, that dramatic influx of money one day a year can make it hard for nonprofits to plan their budgets. That’s why many organizations encourage recurring donations.

“Monthly and quarterly recurring gifts provide charities with a steady stream of revenue throughout the year,” writes Ashley Post at Charity Navigator. This allows charities to plan well for the months ahead because they know what they have to work with.”

You might be worried you don’t have room in your budget to donate regularly. But even small amounts can go a long way. A monthly $10 donation adds up to $120 over the course of a year. And it also makes it easier to fit giving in your own budget each month, instead of saving for a larger contribution.

Host a Virtual Food Drive

Like so many activities during the pandemic, hosting a food drive has gone virtual too. And with the power of social media, it’s easier than ever to pool together funds to help people in your community. Food banks like Feeding America offer virtual fundraising platforms, or you can set up a virtual drive through Facebook.

A virtual food drive can help you round up friends and family to make a more sizable donation than they would be able to individually.

Use Your Employer Match

No matter how modest your own donation may be, you might be able to multiply the donation to your favorite organization with an employer match.

About 75% of medium and large companies offer some sort of employee giving program, says Bryan de Lottinville, CEO of corporate giving platform Benevity. But only 10% of employees participate on average, leaving a lot of money on the table.

“Often, employees are not even aware that their employer has a program, or it applies to a narrow list of eligible charities, or more frequently, the process for accessing the matching funds is so clunky and cumbersome that many time-constrained employees don’t bother,” de Lottinville said.

But taking a little time to figure out your employer’s system could have a big impact. The most common match is one-to-one (so for every dollar you donate, your company will match with another dollar, typically up to a certain amount), de Lottinville said, he’s seeing more companies offer two, three, or even five-to-one matches.

If your company processes matching payments manually, there may be a minimum donation amount. But if it uses a software program that processes payments electronically, you can likely donate any amount, de Lottinville explained. “It could be as little as $5 that turns into $10—or more,” he said.

Take the New Tax Deduction

Nonprofit organizations have long noted the tax-deductible nature of your donation in order to encourage donations. But unless you itemize your deductions each year, you typically don’t see any tax savings in exchange for your generosity. That will change when you file your 2020 taxes in spring 2021. The CARES Act allows taxpayers to deduct up to $300 per year, even if you take the standard deduction. The catch is that only monetary donations count toward this deduction—donated goods do not. This new deduction won’t be much help to you right now, but it may provide a small benefit when it’s time to file your tax return.

Read more: 4 Financial Tax Breaks To Help During Covid-19

Consider Volunteering

Short on cash, but have a little time? Many organizations are in need of additional volunteers this year to fill in for those who can’t serve due to health concerns. But food banks are keeping social distancing in mind, and offering opportunities to work at contactless or drive-up pickup locations.

Some food-focused nonprofits have converted some of their volunteer positions to virtual ones—you can perform tasks like writing notes or making calls to thank donors from the comfort and safety of home.

It doesn’t take much time to make a difference. Meals on Wheels delivery routes are planned to take about an hour and a half, and you can commit to delivering just once a month if that’s all your schedule allows.

You may be able to make your volunteer hours go even further through an employer-sponsored plan, de Lottinville said. Some workplace programs reward volunteer hours with currency that can be donated to a cause of your choice.

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Thanks to Covid-19, some folks are broke and some are flush. Here’s how to talk about it

(CNN) – As the pandemic rages on, millions of Americans are suffering financially while millions of others are doing just fine — some even better than ever. But how do you talk about money with friends or your own family, without feeling ashamed or offending anyone?

America was already economically divided and a “don’t-talk-about-it” money culture, said Alex Melkumian, a licensed marriage and family therapist and founder of the Financial Psychology Center in Los Angeles. Now, with people finding newly exposed sensitivities and dividing lines, gaps are widening and conversations have become even more difficult.

We’re already in a period of financial trauma for people, said Melkumian. Conversations, which leave people feeling judged or insulted, don’t help. Here’s how to talk about money while being sensitive to those around you.

Listen more, spout advice less

Jake Morris was starting a financial advisory business and his wife Whitney was a verbatim hearing recorder for the Social Security Administration in New York’s Hudson Valley when the pandemic struck. Very quickly, Whitney’s work dried up as hearings were put on hold then went to a telephone format and the launch of Jake’s business was delayed.

Then he got a text from someone in his inner circle: “Do you both still have jobs?”

Morris said it was so insensitive that he had to laugh.

“To me, that was so stark. It was almost funny,” Morris said. “But so harsh.”

With their job situations turned upside down in a matter of days, they still weren’t over the shock. They have each found work in their own ways, but it is not at the level it was before.

“Anyone who has had a job loss or gone into retirement knows there is a loss of identity,” he said. “We need a little sensitivity training, I think. It isn’t helpful to say, ‘How does it feel to have your whole life torn out from under you?'”

Jake Morris found listening to be the most helpful way to hear about other people’s financial situations.

Based on his experience, he now asks people he meets, “How has this impacted you?”

“I let them talk about it the way they want to,” he said.

If you’re the person who has remained employed and is financially unscathed, do more listening, Melkumian advised.

“The most important thing we can do is listen and resist the urge to jump in and fix it, because much of this can’t be easily changed.”

Suggesting that someone ‘pivot and do something else,’ for example, can be good advice, Melkumian said. But your friend or loved one needs to be ready to hear it.

“You may have connections to offer them, but it is your connection with them that is most important,” he said.

Pick up the phone

These serious conversations are best had in person. If social distancing is preventing that, a phone call works best.

Nothing on the topic of personal livelihood and well-being is better conveyed by a text, said Ashlee deSteiger, a certified financial planner with Gunder Wealth Management in Michigan.

“With friends and family, I don’t want a text,” she said. “There is just too much tone to be lost in a text.”

She suggests setting boundaries like not texting in frustration or sharing things in which tone can be misinterpreted.

“Those conversations need to happen over the phone or face-to-face,” she said.

If you’re the one receiving the insensitive texts or messages, avoid getting defensive and try to consider where the other person is coming from.

“I suggest reframing the situation to, ‘I know my friend or family member is doing the best that they can for themselves and their family.'”

That, she said, may help you see beyond the posts and conversations that you think lack empathy.

Be direct

If you are having financial difficulties, now is the time to speak up about it, Melkumian says, because you’re not alone.

“If you are really struggling and feel you can’t say to your friend, ‘I don’t know where my next rent payment is coming from’ — then when can you say that?”

When Ed Hart was able to reopen his hair salon in Hermosa Beach, California, he noticed many of his clients experienced the shutdown much differently than he had.

While Hart was struggling after a major loss of income, his customers were working from home, earning the same income, some even more than before.

“People that I know who retired well are fine,” he said. “Younger people I know that work for large companies are working out of their homes, they are okay. But the people who are consistently struggling and having trouble are business owners, entrepreneurs.”

So he decided to address this awkward disparity directly.

“I made a sign and put it by my station,” he said. “It says that there is no secret that we are going through a financial hardship. I understand that they may be going through a hardship, too, so we won’t raise prices. However, if you are financially strong, pay more if you can.”

And they have. After one client received a $200 treatment, he said, she included a tip and left.

“It was a $1,000 tip,” he said. “I called her right away to thank her. I didn’t know what to say. It was overwhelming. ‘Don’t worry,’ she told me.”

Don’t be tone deaf

Some people who have celebrated things like buying a house, taking a trip or getting a new job, have been met with anger by hurt friends and family who say it smacks of being tone-deaf to the moment. Just look at the public reaction to Kim Kardashian’s post about her 40th birthday celebrations on a private island earlier this month.

The response was largely not enthusiastic.

“Congrats on this nomination for most tone deaf tweet of the year,” Twitter user @beyondbrighton replied to Kardashian. “You want normal? Try people unemployed, at food banks, teaching kids at home, or worse in the hospital by the tens of THOUSANDS! Oh the plight of the wealthy & their struggle to an escape to a private island.”

The context matters when sharing good news, said Melkumian.

“If you post your celebration in a way that says, ‘I’ve been struggling and in order to overcome something and I did this, this and this,’ documenting and chronicling your fight, it isn’t out of context,” he said.

But in this moment, there are other things to keep in mind, he said.

“There are political factors, sounding tone deaf, other people being broke,” he said. “How do you tell your truth without coming off as insensitive?”

It may be that there isn’t a way to do that, he said, and it is better right now to keep it to yourself and just to listen.

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How advisors can cope with a winter of discontent

(The Globe) – An especially difficult aspect of the COVID-19 pandemic is that the journey through this episode is
so long – and it’s bound to feel even lengthier as the dreary days of winter arrive.

This fall and winter, advisors and their teams across Canada will be working through the colder, shorter days with additional pandemic-driven mental health challenges, including the probability of less in-person socializing and
more negative news. That makes it more important than ever for advisors and staff to take care of themselves emotionally.

“Our mental health affects absolutely everything,” says Natasha Knox, founder, and financial planner at Pax Financial Planning and Education Inc. in

New Westminster, B.C. “It affects our physical health, probably to a degree that we’re only now beginning to appreciate. It affects our judgment, which as advisors is absolutely critical. It affects our recommendations, but it also affects our ability to be present for our clients, to be calming and to be there for them – [and a mental health problem] is definitely one of those things that can escalate if it does not get addressed.”

Ms. Knox says she keeping her mental health in check by limiting the amount of COVID-19 news she consumes and the time she spends on social media. She also finds it helpful to get outside, even for 10 minutes and during bad
weather, and to maximize time spent outside by parking her car in the furthest spot in the lot when running errands. After years of resistance, she has given mindfulness a chance, too.

“Advisors need to be aware of what they’re bringing into the room with them,” she says. An especially difficult aspect of the pandemic is that the journey through this episode is so long – and it’s bound to feel even lengthier as the dreary days of winter arrive.

Dr. Alex Melkumian, a financial psychotherapist and founder of Financial Psychology Center in Los Angeles as well as a member of the Financial Therapy Association’s board of directors along with Ms. Knox, says that a person’s initial psychological response to a stressful situation is one of fight, flight or freeze, “but it’s a response that we can’t sustain for a long time. Either it gets resolved, the stressor goes away and your psychological and emotional response dials down, or it morphs into a more traumatic response.” At this point, some advisors may be experiencing that more traumatic response. Even those who have fared reasonably well throughout the year may be facing what Dr. Melkumian describes as “financial survivor’s guilt,” having witnessed clients and others around them struggling with lost jobs and financial hardship. That may be combined with “compassion fatigue,” after spending months helping clients manage the financial impacts of COVID-19.

To cope through the coming months of grey skies, early nights and snow, Dr. Melkumian emphasizes that it’s important for advisors to remind themselves that they’re not alone going through this situation. He adds that it can help to have conversations with other advisors, sharing concerns and frustrations.

“It normalizes some of your experiences when you hear somebody else validate them because they went through the same things,” he says. Advisors’ firms can be a source of support as well. Some are investing in creative mental health-focused initiatives to assist advisors and their teams.

Brent Allen, senior vice president of financial services distribution at IG Wealth Management in Winnipeg, says his organization implemented a “need a day, take a day” policy earlier this year that offers 10 “wellness days” a year
beyond sick days, with additional days off added from time to time – most recently on the Friday of Mental Illness Awareness Week in early October.

Combined with flexible work schedules, the extra time away from work is designed to help staff manage responsibilities, including homeschooling children and caring for loved ones, Mr. Allen says. Through “multiple levels of communications,” IG Wealth Management is also sharing information with advisors and employees about employee benefits, including the employee assistance program, as well as topics such as nutrition and mental health.

The firm has partnered with a national fitness company to run virtual classes hosted by certified trainers.
Furthermore, it’s making mental health a key focus at its now virtual leadership conference in November, planning live question and answer sessions for advisors and employees focused on mental health topics, with the option to sign in anonymously.

“It’s important for us as leaders to demonstrate that we care, that we’re open and that we’re supportive, because leadership is not about titles. Leadership is about doing the right thing at the right time and making sure that people are taken care of,” Mr. Allen says.“If you’re setting the proper tone and have the right approach and empathy toward everyone on the team, they will tend to pass that down throughout the entire organization.”

Carol Lynde, president and chief executive at Bridgehouse Asset Managers in Toronto, has been working to equip advisors with information on mental health for years through her organization’s Mental Health & The Financial
Advice Relationship program.

That initiative now includes a webinar series for advisors, addressing topics such as “Communication and Self-Care in a Screen-Based World” and “Boundaries, Balance & Burnout.”

Whether it’s through exercise, nutrition, mindfulness, meditation, breathing techniques or other strategies, she says advisors and their teams “need to take care of their own mental asset” before they can help clients effectively.

“Check in with peers; debrief with your team, with colleagues, with other advisors,” she says, echoing Dr. Melkumian’s advice. Most importantly, she says advisors should become more comfortable with saying the word “no.”

“Sometimes, we get ourselves into situations because we say ‘yes’ too often. We have to understand our own capacity and make sure that we’re not agreeing to unreasonable deadlines and requests that just add more pressure to a time that’s already very, very stressful,” Ms. Lynde says.

“We all have buckets of mental health. Some mornings, your bucket is full, and other mornings it may not be so full. … We need to be aware of that and know that maybe I need to take a break. Maybe I need to take a day off. Maybe I need to be a little more flexible with my time today. Maybe I need to get outside more often and get some sun [because] we’re going to be in this for a period of time.”

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Will COVID Change Our Habits Permanently?

(Money Management) – The coronavirus pandemic has upended everyone’s life and led to some significant habit changes. The old (and ironically somewhat tired) personal finance advice of skipping a morning latte may be forced upon you if you no longer have a morning commute.

Such an impactful event also brings up questions of how people are coping and which new habits will stick when we no longer have to worry about the coronavirus. We talked to some experts to find out how COVID has changed us and what changes may be still to come.

FIGHT, FLIGHT, OR FREEZE

Looking back at how people initially responded to the coronavirus outbreak offers some insight into how a crisis can impact us.

“First and foremost, COVID is affecting our mental health by creating an initial stress response: fight, flight, and freeze,” says Dr. Alex Melkumian, founder of the Financial Psychology Center in Los Angeles.

Perhaps you’ve seen or experienced some of these responses. People “fighting” by updating their LinkedIn profile and jumping into a job hunt. Flight and freeze might look like avoiding the situation and putting off everything until the last minute. Although, a similar lack of response can come from optimism bias—the belief that everything will work out okay.

Of course, there’s more at play than an initial response, and people react differently depending on the situation. For example, after a layoff some people may avoid filing for unemployment due to shame or pride rather than a flight or freeze response.

Crisis responses have also played out in different ways on a large scale. If you think back to the early days of the pandemic (a lifetime ago), you’ll remember how panic-buying led to toilet paper shortages.

SOME FINANCIAL HABITS ARE ALREADY CHANGING

Over half-a-year in, people have had time to adjust, develop new routines, and implement changes. Some of these might not be habits, per se, but they can still have a long-term impact.

“A lot of what holds people back is that they think there’s all the time in the world to get it done,” says financial therapist Lindsay Bryan-Podvin. “When the reality hits… the fire burns to get things going.” Many of her clients are finally crossing things off their financial to-do list, such as getting life insurance or writing up a will.

A McKinsey & Co. survey from October 7, 2020, offers more insight into what types of financial habits may be changing:

  • Most people are cutting back on discretionary spending.
  • About 23% to 25% of people recently started using food or grocery delivery services for the first time, or are using them more often. Of those, over half plan to continue using these services after the coronavirus subsides.
  • A small group (12% to 13%) is trying curbside store and restaurant pickup for the first time, and about half of that group plans to continue using curbside pickup.
  • More than two-thirds of people are trying new shopping methods, brands, or stores. Many are “trading down” to find cheaper brands and retailers.
  • Since the pandemic, people are increasingly aware of how companies care for their employees’ safety (23%) and a company’s purpose or values (17%).
  • The increased use of social media, wellness apps, online streaming, and online fitness programs may continue post-pandemic. Topping the list of changes that may continue is an offline activity—regularly cooking.

Katherine Milkman, a professor at the University of Pennsylvania’s Wharton School, also recently shared some insights on what habits can be “sticky” in an interview on the Slate Gist podcast and article by Joe Pinsker in The Atlantic.

For example, it’s not hard to imagine someone developing a preference for a lower-cost brand or more convenient services. But washing your hands for 20 seconds might not stick when there’s no fear of a virus.

TRAUMAS MAY STAY WITH US

Specific habits aside, there could be a lasting impact on people’s relationship with their work and finances.

Even before the pandemic, the American Psychological Association’s annual Stress in America survey from 2019 found that most people listed work and money as one of their most significant sources of stress. The pandemic and resulting layoffs has only exacerbated those stressors.

“This is our Great Depression,” says Melkumian. “The level of anxiety and concern and worry could be exponential to where we were before. From a mental health standpoint, we’ll see an increase in financial trauma.”

There’s no single answer to how this plays out. The pandemic is affecting households in drastically different ways, and even those who are impacted in similar ways may have different responses.

“How much we’re going to be ruled by fear, caution, worry, anticipation, and doomsday scenarios is going to be part of our overall psychology and how we approach finance,” says Melkumian. “There may not be answers until we get there, but we need to beware of our psychology.”

He also draws the connection between financial stressors and the resulting impacts on how you may interact with your spouse or kids, and your overall wellbeing. “In turn, how does that affect your physical health? What happens to your family and identity as a provider and contributor?” Melkumian asks.

BUT THIS IS ALSO AN OPPORTUNITY FOR CHANGE

While the pandemic can cast a foreboding shadow over everything, if you can get out of crisis mode, it can also be a significant opportunity to rethink your life and the habits you want to change.

As Bryan-Podvin shared, some of her clients have done this by checking off some of their financial to-dos. She’s also observed a growing interest in making more drastic lifestyle changes. “They’re starting to consider what life would be like if they downsized housing and could retire earlier, or spend more money elsewhere,” she says. What might have been a daydream before has become a more realistic option.

“Obviously there’s a lot of uncertainty. We’re in a limbo pattern of not knowing when we can resume normal life,” says Melkumian. “But I’d love COVID to be the call to action to improve and increase our financial consciousness, awareness, and literacy.”

If you’re ready to start making some lasting financial changes, a free one-on-one counseling session is a great place to start. Our debt and budget experts are available 24/7 to help you discover resources, learn valuable skills, and begin realizing your goals.