How your spending habits are affecting your health

Ever sat around with a close group of friends discussing how you'd spend your multi-million Oz Lotto winnings?

There's the friend describing five vintage cars, a three-story mansion by the ocean and a holiday house in the Bahamas; and there's another mulling over high-interest savings accounts, property investments and retirement options.

An argument ensues. If you're the friend who tends to spend with careless abandon — and not just with your imaginary pay check — your financial situation could easily spiral out of control and into serious debt. 

According to ASIC, Australians collectively owe around $32 billion on their credit cards, which is seriously bad news for our stress levels.

"Debt can be very debilitating, creating anguish and a sense of hopelessness," says Dr Peggy Kern, senior lecturer in the University of Melbourne's Centre for Positive Psychology.

"People often deal with the stress of debt by self-medicating — from drinking to compulsive shopping — which are self-defeating."

Dr Kern says that there are prolonged symptoms to look out for, which suggest your finance-related stress may have developed into something more serious. "Signs such as feeling helpless and hopeless, problems sleeping, problems eating, problems focusing and trouble getting out of bed each day shouldn't be ignored," she says.

Taking back control

Seeking help from professionals is vital in addressing your financial health struggles.

A key step in the recovery process is to stop engaging in the behaviour that caused the stress in the first place — overspending. "That's a lot easier said than done, as often there are underlying issues that are driving the behaviour," says Dr Kern.

"A counsellor or psychologist can be helpful for getting to the root cause of your feelings and behaviours. It's important to recognise that issues like overspending and the resulting stress develops over time."

Canna Campbell, financial advisor and host of SugarMamma TV, suggests removing temptation entirely and figuring out a plan to get yourself back in the black.

"Change your habits so you don't spend your spare time looking at your favourite shops," she advises.

"Set clear and defined financial goals that have a deadline — for example, 'my credit card debt must be paid off by December 10, 2017'. This will make you accountable and the pressure of the deadline will motivate you to put the right action into place."

Additionally, Dr Kern recommends creating a budget that you stick to stringently and taking scissors to your credit cards. Research suggests that not only do people spend more money when using credit cards, they also make less healthy choices.

A US study monitored people's supermarket shopping for a year, with half the people paying in cash and half of them paying on a credit card. The people who paid on a card spent more money and bought more unhealthy snacks than the others.

Making other small concessions can also go a long way to changing your financial situation. Campbell kickstarted her savings with lifestyle changes such as selling unwanted furniture and clothes, inviting friends over for dinner instead of eating out and taking on extra work over the weekends:

"From looking at the way I spend cash and earnt money I learned to be more selective with my resources and most importantly my value system," she says.

"I realised that connecting with the people in my life is more important than what we do together whilst spending unnecessary money."

Gaining control back over your finances is not an easy process, but it is possible.

"Spending habits are not hard-wired," says Dr Kern. "They are impacted by our past, beginning with how our parents raised us. And there are some really good programs and groups out there that can help people change their habits and get out of debt."

*Learn more about how you can manage your spending habits for better health and wellbeing. Head to Suncorp to find out your Money Profile, and let's get doing more with your money. Suncorp-Metway Limited ABN 66 010 831 722.