How stress impacts your health and finances

A recent study¹ suggests that anxiety and depression could be costing Singapore nearly S$16 billion – or 2.9 per cent of its gross domestic product – in lost productivity annually. While staggering, the actual burden of mental health conditions could be much higher, once all direct and indirect costs of anxiety, depression, and other mental illnesses² are included.

According to UOB’s ASEAN Consumer Sentiment Survey 2023 , 81 per cent of Singaporeans are worried about their finances, followed by work-related stress at 70 per cent. In today’s fast-paced world, it’s easy to find ourselves stressed by the rising cost of living, tight deadlines, expectations from society, and even FOMO (fear of missing out). While some stress can be good, propelling us towards action, high levels of constant stress can lead to anxiety and depression³. Below, we uncover the hidden costs of stress, as well as explore how we can mitigate its impact on your health and finances.

Figure 1: Singaporeans are more worried about their finances compared with their regional counterparts. Source: UOB ASEAN Consumer Sentiment Survey 2023

The toll of stress on your health

Numerous studies have demonstrated the adverse effects of stress on our health. Chronic stress – or stress that lasts for a prolonged period – has been linked to an increased risk of heart disease, high blood pressure and diabetes⁴. Additionally, stress can negatively impact the immune system, making us more susceptible to infections and illnesses⁵.

Besides affecting one’s mental health, stress can also exacerbate existing health issues such as gastrointestinal problems and insomnia⁶.

The financial impact of stress

The relationship between stress and finances is a two-way street. Financial difficulties can trigger a negative reaction, while chronic stress can lead to financial problems. When we are under constant stress, we tend to make poorer financial decisions and may engage in impulsive spending as a coping mechanism⁷. Stress can also impair our cognitive function, resulting in decreased productivity and difficulties at work, which can ultimately affect our earning potential⁸.

On the other hand, stress-related health issues can lead to multiple problems, including substantial medical expenses, loss of income due to absenteeism, and even job loss.

With studies showing that stress can indeed affect both our health and finances, it is crucial to understand what can be done, whether it is to prevent the onset of stress or to reduce its impact.

Tips to manage stress and protect your finances

1. Practise stress-management techniques: Incorporate relaxation practices such as mindfulness meditation, yoga, or deep breathing exercises into your daily routine to manage stress levels effectively. Research has shown that these techniques can significantly reduce stress and improve overall well-being⁹.
2.  Establish a budget and financial plan: Develop a budget that outlines your monthly income and expenses, and create a plan to pay off debt and save for future financial goals. Having a clear financial plan can alleviate stress related to money matters and help you make more informed decisions.
3.  Prioritise self-care: Ensure you are getting adequate sleep, eating a balanced diet, and engaging in regular physical activity. Prioritising self-care can improve your physical and mental health, making you more resilient to stress.
4.  Seek professional help if needed: If stress is significantly impacting your health or finances, consider seeking help from a mental health professional, financial planner, or credit counsellor. These experts can provide guidance and support in managing stress and addressing financial concerns.
5.  Build a support network: Connect with friends, family, and co-workers who can provide emotional support and practical advice during stressful times. A strong support network can help buffer the impact of stress on your health and finances.
6. Focus on long-term goals: Concentrate on your long-term financial and personal goals, rather than short-term stressors. Adopting a forward-looking perspective can help you make better financial decisions and cultivate a more balanced mindset.

By understanding the relationship between stress and these areas of our lives, we can take proactive steps to manage stress and protect our well-being and financial stability. Implementing stress-management techniques, prioritising self-care, and seeking professional help when needed, are just a few ways to safeguard your health and finances in the face of life's challenges.