What are the effects of financial problems to students?
Worries about money lead to ongoing stress, anxiety and even depression; they crowd out the brain's ability to focus on longer-term achievements; they even lead to higher-risk decision-making with potentially disastrous consequences.
Stress and anxiety, inability to afford study materials, and working additional hours, which impacted study time, were noted as the major consequences of financial problems on academic performance.
Feeling beaten down by money worries can adversely impact your sleep, self-esteem, and energy levels. It can leave you feeling angry, ashamed, or fearful, fuel tension and arguments with those closest to you, exacerbate pain and mood swings, and even increase your risk of depression and anxiety.
Financial problems can have a negative impact on students' motivation to learn. Concerns about finances can lead to lower goal commitment, academic engagement, and persistence, and can increase the likelihood of dropping out or reducing course loads.
Studies reveal that financial stress can bring depression and anxiety (Andrews & Wilding, 2004), poor health (Northern et al., 2010), trouble in continuing towards completion of degree or poor performance in academics (Harding 2011; Robb et al., 2011).
A recent survey shows students who suffer from financial stress have lower grades and earn fewer credits: 34% said financial stressors had harmed their academic performance, and another 20% reported they had to reduce their course load due to these same stressors.
Importantly, financial literacy matters: it helps people make savvy financial decisions, including being less influenced by framing, better understand information that is provided to them, better understand the workings of insurance, and being more comfortable using basic financial instruments.
Parents may interact with their children in tense or punitive ways with a short temper; children may respond with negative behaviors and emotions, and teens may face problems in school, negative peer groups, lost self-esteem, and delinquency.
Generally, financial stress can generate, in some cases, physical consequences such as insomnia, loss of appetite, stomach ache and headaches; in other cases, psychological repercussions such as anxiety and panic attacks, depression, mental rumination (repetitive thoughts about past or future situations).
Women are more likely to experience financial stress than men — 56 percent of women said money has a negative effect on their mental health, compared to 47 percent of men. Of those who said money is a stressor, 29 percent said they worry about it daily.
How many students struggle financially?
Financial distress is prevalent among undergraduates nationally, with almost three in four students experiencing financial difficulties in the past year, according to the fall 2022 Student Financial Wellness Survey.
The results of this survey underscore the importance of recognizing the impact of financial difficulties on high school students' self-esteem. Financial constraints can lead to stress, anxiety, and a sense of social exclusion among students.
The terms financial issues and financial strain are typically used to describe a difficult or challenging financial situation. Financial hardships can be caused by a variety of situations and behaviors such as job loss, medical bills, a lack of financial planning, poor spending habits, and other life events.
Shame and embarrassment were common consequences:
Children may also feel guilty, anxious and unable to help their parents deal with their situation – this also has an impact on their confidence and feeling of self-worth.
- Losing your job.
- Taking a salary cut.
- Owing money to friends or family.
- Being in debt.
- Unexpected costs, for example, medical bills.
- Failed investments or business ventures.
- Problem gambling.
The health impacts can be severe
High levels of financial stress can impact people's wellbeing, raising levels of psychological distress, anxiety and depression. A review found clear evidence for a link between financial stress and depression, and that the risk for depression was greatest for people on low incomes.
Financial instability can negatively affect students' academic performance by limiting their access to resources such as stationery, textbooks, and transportation, leading to poor attendance, lack of concentration, and inability to meet financial needs.
2 Stress can result from not making enough money to meet your needs such as paying rent, paying the bills, and buying groceries. People with less income might experience additional stress due to their jobs. Their jobs might lack flexibility when it comes to taking time off.
Financial trauma can lead to significant mental health consequences, including increased stress, anxiety, depression and feelings of shame, guilt or worthlessness. It also strains family dynamics, causing conflicts, breakdowns in communication and sometimes even domestic violence.
Key short-term goals include setting a budget, reducing debt, and starting an emergency fund. Medium-term goals should include key insurance policies, while long-term goals need to be focused on retirement.
What is financial responsibility?
Financial responsibility means being prepared for the unexpected. Most experts agree that you need to be able to support yourself financially for at least six months without an income.
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- Listen to financial podcasts. ...
- Read personal finance books. ...
- Use social media. ...
- Keep a budget. ...
- Talk to a financial professional.
Money allows us to meet our basic needs—to buy food and shelter and pay for healthcare. Meeting these needs is essential, and if we don't have enough money to do so, our personal wellbeing and the wellbeing of the community as a whole suffers greatly.
GoHenry's latest research shows that 71% of kids are worried about the cost of living crisis. So, even if money isn't openly discussed in your home, your kids are likely concerned.
You'll be there to emotionally support them every step of the way, just not financially. And don't underestimate the gift of teaching your children how to manage money. When they can set a steady course toward their own financial success, it helps them live within their means and helps you keep your retirement savings.
