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Financial problems and stress: which comes first?

by Roos van den Wijngaard
Posted on March 06, 2019

Financial worries are among the most important causes of stress. One in five millennials even indicates to suffer from mental health problems as a result of problematic debt. It might seem that stress is just the result of poor money management, but could being stressed also be a cause? With stress levels rising globally due to increasing demands at work, at university or within our social environment, could it be that stress also affects our financial decisions? Yes, it seems so.

Sometimes we feel stressed for a short period of time, for example when the payment device in a restaurant tells us that our balance is insufficient. Adrenaline rushes through the body, cheeks start to become red, creating a state of optimal focus to find out how to pay instead. So what do you do? Do you take a moment to think about the consequences of using your credit card? Or do you take the risk of not being able to pay back the additional charges? Probably the latter, but this might be different for men or women.

And what exactly happens when stress persists for a longer period of time, also called “chronic stress”? Are we more risk seeking, more risk averse or do we eventually even shut our eyes to potential risks?

Interested in knowing the answers? Read all about the effect of stress on financial decisions here!