The real cost of anxiety

In a world gripped by financial stress, worrying about money has become the new national pastime.

It's no longer the preserve of miserly great-aunts who die with thousands in the bank but nothing in the fridge - financial anxiety is sweeping the population on a wider scale than ever.

GP Eileen Sables says it's the central theme of many of her patient's consultations in the past six months, particularly people worried about the possibility of redundancy.

Figures from the Retirement Commission reflect a surge in people seeking information to plan and manage their personal finances.

Last year more than 1.2 million people visited the commission's website, sorted.org.nz. And visitor numbers so far this year are up 30 per cent.

More than 220,000 Sorted booklets were distributed throughout New Zealand last year, and the number for the first two months of this year is already more than 50 per cent of last year's total.

Retirement commissioner Diana Crossan says website visitors are not just taking a cursory glance - they are formulating budgets and using the site's debt calculators "hugely". Calculations made so far this year are up about 60 per cent.

Although those who are drowning in debt or who have had their life savings gobbled by failed finance companies may have cause to worry about their fiscal security, others fret unnecessarily or disproportionately. These are people who, by comparison, are quite well-off but don't think they are, financial adviser Liz Koh says.

"They're the sort who always see the negatives and never the positives. They worry themselves sick when they should be out there enjoying their lives."

Sable says that the recession time "definitely turned up the heat on those sorts of people". Worrying about finances has been a common theme for those developing a depressive illness, she says.

In the past they may have worried about their children, or socialising.

Sable tries to nut out whether the problem is real or perceived and encourages chronic worriers to see a psychologist.

Koh sees clients who worry about not having enough for retirement when in fact they're "way ahead of the population". In appropriate cases she encourages retired clients to spend some of their capital and "not worry about money as an end in itself".

Times like these exacerbate unjustified financial anxiety, says Canterbury University psychology professor Simon Kemp. Some people react more negatively than others to the same environment.

Waikato University psychology professor Michael O'Driscoll says: "People vary along a dimension called negative affectivity or neuroticism - and all of us have a little of it. We react with anxiety and perhaps even depression at times to negative information, but some are more prone to that than others.

"It's a general mood state that people carry around with them and some tend to see the glass half empty."

O'Driscoll says they bolster their beliefs by looking for negative information, making it difficult to change their focus.

Psychologist Charlotte Hinksman says that a bombardment of bad financial news directly affects a person's unconscious mind: "Moral panic through the media about money is giving people an instruction to worry - even if they don't really have a reason to."
This is a real problem that pressurises people's coping resources and affects their relationships, says Kemp's colleague, Professor Garth Fletcher. A common manifestation of financial stress that Hinksman sees is inability to sleep properly.

Fletcher says "ruminating obsessively" won't help. Instead, people need to come up with practical solutions that address their financial situation and their anxiety.

Worrying is imagining an undesirable event happening in the future, Hinksman says, to which the body responds as if that event has already occurred, placing it under stress.

The way to stop worrying is to interrupt the thought pattern by asking yourself if there is actually a problem at present.

Money mentor Anton Nadilo - author of Budget Wise, Dollar Rich - says financial stress worsens when people try to bury it.

Putting in place a plan helps alleviate anxiety. In his experience, mostly when people are anxious about something, "it's potentially the universe telling them they should be worried about it for some reason.

"If you are worried, take some action and do something about it."

Most cases of financial stress he sees stem from people's money mismanagement. "We've got clients earning $200,000 a year who can't pay the $60 power bill sitting on the table," Nadilo says.

Their anxiety is driven by earning a good income but not "getting ahead". Once they identify their bad money habits they can live comfortably and put in place plans for their short-term and long-term needs.

Success with money is 80 per cent mindset and 20 per cent mechanics, Nadilo says. And the mechanics of money management haven't changed for hundreds of years: attend some courses, buy some budgeting books or work with a money coach.

The tricky part is examining negative beliefs picked up during a person's upbringing and later associations.

People's core values about money are often out of alignment with what they do with it, Nadilo says.

"Their foremost value may be security, yet they spend money they don't have on things they don't need to impress people who don't care."

Palmerston North-based financial adviser Kathy Jarrett believes that society's money values are shifting towards more thrifty self-sufficiency

"People and the planet are going to matter. Forget consumption - we're actually going to know our neighbours and be better people," she says.

TIPS TO KEEP YOU SANE

Tips from money mentor Anton Nadilo:
* Don't place too much value on what others think, especially when it comes to purchasing decisions.
* Once you have financial goals and plans in place, whenever you are about to make a financial decision, ask yourself whether it will help you move closer to financial wellbeing or further away.
* There is not one right way to achieve financial security, Nadilo says. While residential property investing is popular in New Zealand, it doesn't suit everyone's mindset.
* There are three ways to create wealth: invest in property; build a business or invest in shares, and it's a matter of finding which vehicle you feel passionate about. The worst strategy is trying to dabble in all three - pick one and do it well.