- Financial tension, as a result of rising inflation, has become a major source of anxiety for people globally.
- This includes people in SA, where the cost of living has impacted millions.
- A psychiatrist offers tips to cope when feeling anxious and overwhelmed.
The global inflation rate has spiked and we're sure feeling the impact on our wallets. From fuel and transport to groceries and household utilities, the cost of living seems to have ballooned, making us face tough choices when it comes to basic needs.
Simply put, inflation happens when the price of goods and services increases, which reduces the purchasing power of our income. According to the World Economic Forum, the rise has been driven mostly by pent-up consumer demand after the Covid-19 pandemic and the Russian invasion of Ukraine.
It's safe to say that, with these financial stresses and uncertainty, our mental health is taking a knock. The results of a recent poll revealed that more than 80% of Americans reported significant stress levels due to financial concerns, inflation, the pandemic and the Russia-Ukraine conflict. In fact, financial stress was ranked at the highest recorded level since 2015.
"I'm sure the situation in South Africa might even be worse," says Professor Renata Schoeman, a psychiatrist and head of the MBA Health Care Leadership programme at the University of Stellenbosch Business School.
SA's situation no different
Schoeman told News24 that a SweepSouth survey released last week shows that domestic workers in South Africa, for example, have especially borne the brunt.
"In South Africa, 25% of domestic workers lost their jobs over the past year. And their transport went up by 10%, while food went up by 8% - and their salaries didn't rise accordingly.
"So although most people did get salary increases, stuff that you [need] to buy has become even more expensive, so your money is worth less."
Financial stress, debt and mental health
South Africans are the second-most stressed employees in the world, according to Sanlam.
"Being in a constant state of high stress and anxiety about finances increases the circulation of chemicals, such as cortisol and adrenaline, in the body that, over time, weaken the body's immune system and make us more susceptible to both physical and mental illness," says Dr Frank Magwegwe.
Unsurprisingly, trying to stretch your paycheck as far as it can go can take a toll on your mental well-being. Importantly, psychiatrists and mental healthcare clinicians need to take this into account, says Schoeman, because it also influences affordability and access to mental healthcare.
But if you're feeling stressed or anxious about rising costs, there are some actions to take and avoid, in order to relieve financial anxiety.
Avoid panic buying
Schoeman explains: "Inflation and financial stress can become a chronic psychological stress and increase your anxiety - and what often happens is one of two things: either you engage in panic buying, or herd behaviour."
As an example, people usually flock to petrol stations to fill up their tanks amid petrol price increases.
"The other thing is, like with [the pandemic and lockdown], people buy excessive amounts of items and fall prey to specials, such as 'buy three for the price of two', even though they need only one, so they end up spending money unnecessarily," says Schoeman.
Research shows that pandemics are linked to panic buying of groceries and other supplies, but Schoeman says this can do more harm than good, so it's prudent to keep your eye on and buy only the things you need.
Make savings a priority
From a mental health perspective, it doesn't help to worry about things you can't control, such as inflation, says Schoeman.
"We know there's higher unemployment and decreased consumer confidence, so the one thing to try to do is to protect yourself by saving wherever you can. You need to think about and spend on what is important and make savings a priority."
For example, if you have multiple entertainment subscriptions, such as DStv and Netflix, she advises cancelling one of them.
"Or use one car instead of two, or make use of public transport or lift clubs - the aim is to save where you can," she says.
READ MORE | How to be wise with your spending
For necessary items, shop pre-loved
Schoeman suggests trying to increase your cash flow by shopping necessary goods second-hand: "There's nothing wrong with pre-loved items," she says.
In fact, one survey conducted by thredUP shows that nearly 60% of consumers say second-hand items helped them in some way during a time of inflation.
Pay off high-interest debt
It's no secret that high-interest debt can have a profound impact on our mental health. A 2021 study by Viwe Sakela at the University of Cape Town noted that, "... debt and mental health show that being highly indebted is stressful and it leads to psychological problems".
Schoeman advises that, if possible, you pay off your high-interest debt, such as clothing accounts.
"You want to minimise your payment and expenses, but you cannot necessarily avoid debt. [Some] debt is necessary - often you need a house bond, for example, but try to avoid high-interest bearing accounts that's considered luxury items, like clothing."
The bottom line is, "uncertainty is certain", says Schoeman.
"We don't know what the future will bring, so it doesn't also help to worry about the uncertainty.
"Try to understand that some of the discomfort and anxiety that you are experiencing is completely normal. We need to remember that cycles happen: inflations and recessions happen. So don't worry about the things you can't control. Instead, focus on the things you can control."