Do not allow anxiety to impact your finances

*This content is brought to you by Brenthurst Wealth

By Leslie Greyling*

Since the outbreak of  Covid in 2020, the global prevalence of anxiety and depression increased by 25%, according to the World Health Organization (WHO), caused by environmental factors such as social isolation, unemployment, poverty, and constraints on people’s ability to work and engage in their communities.

Leslie Greyling

Financial stress, especially, had a major impact on people’s mental wellbeing, with about 54% being unable to make their money stretch from month to month.

With the pandemic’s effect on the economy and people’s personal finances, something that many ignored – the importance of savings and having an emergency fund – hit home and plans were adjusted to make provision for such unforeseen circumstances.

In South Africa, where 41,8% of households are headed by women, women especially are experiencing severe stress.

Several countries are working to provide mental health and psychosocial support, but low-income countries such as SA do not have the funding or infrastructure to provide meaningful psychosocial support to citizens. This poses a danger to our society.

Companies and employers have realized that they had to accept this responsibility and a range of companies have introduced mental health programs and support for their employees. These include on-site counsellors that offer consultation sessions, and a time-out break/quiet room where employees can go to relax and take a break.

Research shows that most employees work longer hours during the week, more than 70% of professionals work on weekends, because of employment security. So, whether they are back at the office or working remotely, most people are working longer and more hours than before.

The above can lead to burn-out and other general health problems. Continuous stress can cause anxiety in most people, and this has a direct effect on a person’s ability to perform their duties effectively.

Managing boundaries between work and life is a skill set most people don’t have, employers must monitor the number of hours employees work and encourage them to take time off.

The heightened anxiety and stress are also drivers of the trend of many people semi-grating to provinces, especially in coastal regions, that will provide a better environment for their state of mind, and reduce overall stress to promote quality “down” time. The work from home adoption also contributed to people moving away from large cities to smaller towns and coastal areas.

Good mental health helps people cope better with challenges and setbacks and gives them the ability to manage their emotions.

By managing stress and improving your mental health, you tend to make better financial decisions which are well thought through. Many investors are emotional and reactionary, which results in decisions that might not be in their best interest in the long run.

It is important to keep emotions out of your financial decisions and remain objective during challenging times. Consult a financial advisor to assist you with this process and re-evaluate your finances on a regular basis. It might be necessary to adjust your financial plan and objectives during difficult times, to ensure you can still reach your monetary goals.

Behavioural finance shows that feelings and emotions do play a role in investors’ decision making. In other words, unconscious processes drive investment decisions and are an integral part of financial decision making.

It is essential for investors to manage the behavioural impulses of emotional buying and selling following market ups and downs. Some investors get entangled in media hype or fear, trying to invest at peaks, and selling during the valleys of the cycle.

How to navigate volatile markets? Stick to your investment plan and strategy with your financial advisor’s guidance.

  • Leslie Greyling is a financial advisor at Brenthurst Wealth Fourways. [email protected]

Brenthurst Wealth

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