The Real Toll of Financial Stress--And a New Way to Fight Back

While the good folks on our product development team were building our ALEX on Financial Wellness conversation, they came across a bunch of pretty sobering statistics about the stress Americans feel about money.

For example…

According to the APA in 2012, money is Americans’ #1 source of stress, beating out work, family, and relationships. According to the 2014 Financial Finesse Report, 86% of employees report at least some level of financial stress, with 23% indicating “high” or “overwhelming” levels of stress

According to a recent AP-AOL Health Poll, financial stress manifests itself as:

• Migraines/headaches for 15% of people with low levels of financial stress and 44% of people with high levels of financial stress
• Insomnia/sleep trouble for 17% of people with low levels of financial stress and 39% of people with high levels of financial stress
• Severe depression for 4% of people with low levels of financial stress and 23% of people with high levels of financial stress

And that’s just the tip of the iceberg!

What all these findings make crystal clear (not that we mortgage-and-student-loan-having folks didn’t already have a hunch) is that millions of people are carrying around a huge invisible burden of financial stress every day…a burden that can take a serious physical and emotional toll.

So what can be done to help people with financial stress get on a better path?

Well, according to a recent NY Times article, “Stressed By Money? Get on the Couch“, some people are seeing the light with the one-on-one guidance of a new subset of financial advisors called “financial therapists.”

As you might guess, financial therapists are part psychologist and part financial advisor, and they concentrate their attention on identifying people’s relationships to money–and then lowering their stress around the topic, and putting them on a smarter path.

And how do they do that? Well…

1. They engage in multiple conversations with a person, making sure to ask a lot of questions, both about a person’s general life situation and financial situation
2. They make financial planning engaging by getting beyond the usual jargon and abstract concepts
3. And they connect people emotionally to what meeting a financial goal might make them feel or not feel years down the line.

As a result of this kind of intervention, a study showed that people who met with a financial therapist significantly lowered their score on the Global Severity Index, a measure of psychological distress such as anxiety or depression, and increased their score on the Financial Health Scale, generally moving from Poor to Fair/Good.

So… what’s the quick and dirty takeaway for HR folks thinking about how to provide better financial wellness guidance to their workforce?

We’d suggest it’s this:

Communication that involves a back and forth conversation, steers clear of the usual jargon and engages employees on an emotional level is a good bet to help reduce employees’ stress–and get them on a better financial path.