Blog / Rising Inflation and our Financial Anxieties
Rising Inflation and our Financial Anxieties20.10.2023 | Namrata Mishra
According to the Ministry of Statistics and Programme Implementation of India, our annual inflation rate is about 7% as of June 2022. The months before June witnessed inflation rates above 7%. This inflation rate has crossed the Reserve Bank of India’s target inflation rate of 2-6% for the straight 6th month.
Food and related products are experiencing inflation at the most significant level, making inflation a cause of concern for us all. Following foods are transport and communication, health, education, and housing. We can see how inflation doesn’t spare any of us as the above resources are crucial for human survival. Thus, inflation is no longer an isolated concept only to be studied in finance; it has become an integral concern for almost all areas of study.
In this article, we shall see how inflation affects our mental health and well-being, their relationship, and some coping mechanisms to survive this rising inflation.
Inflation causes financial anxiety
Financial anxiety as a term can often be misunderstood. It is not the anxiety resulting from a lack of financial security but anxiety despite it. You have a job, investments, etc., but still fear something terrible will happen.
Inflation reduces people’s purchasing power. Your 100rs note would have meant a lot to you in your childhood, but it doesn’t hold the same importance today because of inflation. We already know the importance of money and money-making today as we spend more time at our workplaces than at home. Most of us are already living for the future, saving money. Now imagine you are in the future, and the money you thought would be sufficient to survive is barely enough to meet ends in life. This is what financial anxiety looks like. It creates a feeling of scarcity around you, leads you to a constant high of worries, and significantly affects your financial decision-making abilities.
Either no-risk or high-risk decisions
As is the case with anxiety, it puts us in a fight-or-flight mode. So, in case of financial anxiety, people either choose options that are very low or absent on risk or extremely high on risks. Both may not be the best traits for reaching financial freedom, especially with rising inflation. While humans try to cope with their financial anxieties in their own unique ways, some common behavior patterns are noticed. These patterns are also signs of financial anxiety:
Hoarding: Going overboard with saving money and hoarding items you think might become expensive in the future.
Overspending: As a form of denial to escape the stress that financial anxiety is causing you.
Avoiding money talks and decisions: They make you more anxious, and you cannot confront the uncomfortable.
Being too generous in lending money: Especially when your own finances are not stable. This is a sign of poor planning you avoided because planning money was a discomfort.
Worrying, “What will happen to all my money?”: Probably because you think you have more money than the amount you can control.
As I write the above symptoms of financial anxiety, I check all the boxes required. Do you feel the same? Avoid ignoring this worry, and consider addressing your anxiety healthily. Consider taking your own sweet time, but educate yourself on money matters at the earliest. Also, a Mental Health Counselor might help you mentally prepare to confront the elephant in the room –
How to live your life with the rising inflation without financial worries?
Well, I am not a master in the field, but maybe these pointers will help you calm your financial anxiety a little:
Prioritize financial goals: This might not be an easy task, but this is important to declutter the mind a little. Be practical and prioritize the top goals out of your many.
Know what you can control, and practice the control – You as an individual cannot control the national inflation rate. Period. You can strategize your business better, collaborate with more people, and cut costs in personal and professional life wherever doable, etc.
Train your mind to function while expecting the worst: Yes, it may not sound very kind to the self, but this is a key to surviving inflation and financial anxiety. Consider taking therapy to be better prepared to reason and view situations from a problem-solving perspective. This will help you practice mindfulness and cope with the fight-or-flight phase efficiently. Also, reach out to subject matter experts and try taking their suggestions or advice; educate yourself to have more clarity in your goals and process.
Care for yourself: As much as you want to, you alone are not responsible for earning for generations. Know your limits and be kind to yourself. Care for yourself enough to enjoy the fruits of the hard work you put into making money. Your balanced healthy mind and body are the fundamental resources; they are your most valuable possessions.
All of us are together in this; you are not alone. Breathe. This, too, shall pass.
If you or somebody you know wants help regarding financial anxiety, consider reaching our ‘Support’ and ‘Engage’ verticals for affordable and inclusive help!
Like our content? Please show us some support by sharing and upvoting!
Image Credits – Pexels