Cost of Living stress during the Festive Season
The Challenges of Financial Stress during the Festive Season: It’s Impacts on Relationships and Mental Wellbeing and How to Manage It
As we move through December, the holiday period is starting to come alive with the final push to end of year celebrations in full swing. People are now preoccupied with making plans before the end of the year, sorting out holiday shopping, the politics of the family gatherings and “just trying to get to January.” It’s surprising that it is considered the most wonderful time of the year when it also appears one of the most stressful.
It also seems that this year carries a unique flavour of stress that feels more acute than in the past; driven by the ongoing cost of living crisis affecting most households. While that might be the same as saying that every Australian Summer is the hottest Summer it’s ever been; it seems to be the case more so now than in previous years. Concerns about mortgage/rent, energy bills, food prices and going into arrears are regularly raised in break rooms and counselling spaces alike. “How will I afford presents for everyone?” “I’m being evicted and worry about having to move in with family around this time of year”, “We need to prioritise paying these bills and I just can’t see a way through this.” These concerns, understandably, can lead to feelings of shame, fear and anxiety, which are acutely felt during a holiday season.
The Interrelationship between Money and Mental Health
In the last 4 years, according to the ABC, reports of financial stress have been higher now than they were before or during the pandemic. People who reported financial stress were two times more likely to be experiencing mental health concerns according to the Money and Mental Health Report by Beyond Blue.
Financial stress can have a range of emotional and psychological impacts such as a feeling helpless or hopeless, stress and anxiety, feelings of panic, shame, isolation, burnout and it can impact on a person’s perceived sense of self and self-worth. These symptoms can also show up physically through issues with sleep and appetite, headaches, feeling exhausted and irritated, increased heart rate and blood pressure.
What’s more is that the research shows us that it is hard to tell how to approach dealing with these issues; do we seek financial advice and problem-solving strategies and hope that this helps regulate our nervous system or vice-versa? This can make it difficult for many people to know where to begin when seeking help and what they can afford to do. Clinicians will often hear how clients are unable to afford continuing to access psychological support once they have used their approved sessions under a Mental Health Treatment Plan (MHTP) and need to provide alternative funding options for client to continue to access clinical support.
The Stigma of Not Coping
Financial stress carries a powerful and often invisible stigma. Many people describe feeling ashamed and inadequate for experiencing financial stress—as though it somehow reflects a personal failure rather than a common human experience. You might feel embarrassed or as if you’re masking, deflecting away from talking too much about yourself or your plans, perhaps feeling less motivated to commit to social events or even invite people into your space for fear of judgement. You may find yourself stuck in thought loops, comparing yourself to others and perhaps feeling like you’re stuck on a hamster wheel and things just aren’t coming together.
Comparison with others intensifies this stigma. As we gather during the festive season and perhaps prepare to provide a elevator-pitch style summary of the year, people may find themselves comparing their achievements to the achievements of peers and relatives, leaving them feeling as though they are lacking or behind. Exposure to curated images online often mask the real financial pressures others are facing, but they still set unrealistic benchmarks. Over time, this can contribute to feelings of depression, exhaustion and burnout, especially when people feel they should be coping better than they are.
It’s important to recognise that financial stress is not solely a reflection of individual shortcomings. External drivers—such as wage freezes, ongoing impacts of COVID-19, illness, redundancies, inflation, economic policy shifts, and the rapid implementation of AI leading to deskilling in white-collar roles—play a major role in shaping people’s financial stability. These structural factors highlight that financial stress is not simply a matter of budgeting better; it is often a response to broader economic conditions outside an individual’s control. Reducing the stigma begins with acknowledging this complexity and making space for open, compassionate conversations about how intertwined money and mental health truly are.
Impact of Financial Stress on Relationships
Rising cost-of-living pressures not only create a practical financial burden but emotional strain that can shape the dynamics of our relationships with others. Inevitably, this stress and sense of instability can risk impacting the way people communicate in relationships, feel able to support one another, navigate shared challenges, or even be open to dating. Again, this is where feelings of shame can isolate you into feeling as if you’re the only one experiencing the strain of cost-of-living. You may feel the need to hide your spending or constantly justify the way you manage your money or shared resources, ‘self-care’ or time spent with friends may suddenly be followed with feelings of guilt and anxiety and questioning how to bring up what’s affordable for you these days. Finally, the idea of being able to afford to date or literally invest in the time, effort and physical costs of dating life - be it hair, clothes, nails or choosing an activity that’s interesting but affordable -may create some feelings of apathy and anxiety alike.
Research shows that, social supports and intimate relationships just as easily increase feelings of financial anxiety as much as they can help lessen the intensity of these thoughts and feelings. They can act as buffers; spaces for reassurance, teamwork and shared problem-solving or they can risk increasing distress when conflict, avoidance, or mismatched coping styles emerge.
“People who feel they have no one to lean on in times of trouble are significantly more likely to experience financial and mental health challenges. Though community participation is important for mental health, withdrawal from community and social interactions is often reported to be one of the first responses to financial challenges.” – Money and Mental Health Report 2022
A dysregulated nervous system on the fritz
Financial insecurity activates the body’s nervous system in a similar way to other life-or-death threats. Despite not being a tangible ‘threat’ the brain understands that some form of currency is an essential resource in many societies for survival. As social beings, trade and currencies of various forms have long existed; informing understandings of value and worth - including self-worth – social position and privilege. This has been internalised into our limbic system and when triggered can make the body feel threatened even without physical danger. Persistent worry about bills, debt, or work activates the nervous system; limiting attention span and intensifying irritability, shame, or fear. When this level of stress is experienced at a chronic level, it can lead to feelings of hopelessness and helplessness, low sense of self, feeling exhausted, ‘checked out’, foggy, flat or feeling generally disconnected from your body or yourself.
All that to say there’s nothing wrong with you—your nervous system is simply doing everything it can to cope and survive. That’s important to remember, particularly when situations feel so out of your scope of control or influence.
Secondly, remember that just because those things are feeling out of your control, it does not mean that your brain and your body aren’t. You may always have the opportunity and option to reconnect with yourself, especially when you’re feeling overwhelmed.
So recognising this may be coming up for you this festive season, what can be done?
First, before we launch into problem solving, let’s practice some self-compassion. These issues are painfully common and most of the stressors you face could feel out of your control right now because there’s a good chance they are. It’s not just a topic of small talk or an opportunity to engage in comparative suffering. In our current world, there are real factors driving these feelings of distress as well as the thought loops it can keep a person stuck in.
It’s impossible to talk about anxiety, distress and even trauma without recognising the broader socio-economic and political climate of our world and how everyday structures directly impact upon our sense of self, our relationships with others as well as our mental health and wellbeing. So take a moment to acknowledge it and unhook from this idea that you are personally responsible and your ability to cope is a measure of success or failure rather than a sign of bandwidth and capacity to hold stress.
Responding to the distress
As mentioned earlier, despite the bigness of these issues it’s important to return to what is within your circles of control and influence, starting with you individually and work your way outward. There are heaps of strategies available to help soothe emotional dysregulation. Your approach can vary depending on the trigger and emotions being experiences but activities like:
· Mindful breathing
· Stretching,
· Going for a walk,
· Dance,
· Connecting with nature,
· Music,
· Art
· Body-doubling and ground support person
All these approaches are all proven to be effective (and *mostly* free). The aim of these activities is not to achieve a state of calm, rather a feeling of being grounded and connected to yourself, a more manageable inner dialogue and hopefully a feeling of readiness to plan.
Then we can start to incorporate some financial-specific strategies such as:
Start a Money Diary
For some it may be that by December it’s already feels too late but that doesn’t mean there’s nothing to be done. Not to be too optimistic but even if there’s nothing that is going to magic up a lump sum of cash, there is still something to learn from what you’re doing to manage the situation now. How many years have gone by where you did not know *exactly* how much you spent over the festive season? Wouldn’t that be a great number to have, even if it’s to know it can never get that high again? You might also surprise yourself with what you have been able to do to manage the budget already.
This strategy is not about control – it is about information gathering. There are many different examples of money diaries online, but it can be as simple as:
Logging details under headings like DATE, ITEM, AMOUNT, CATEGORY
It can be electronic, through a notes app or using a money tracking app or a physical diary/notebook that you can hand-write your transactions.
Track your spending patterns for a period of 3-4 months on a weekly, fortnightly or monthly basis. This will help build a picture of how often the bills are coming in, how much they are on average, and also track your holiday spending – this will be valuable information for next year if and when you need to create a budget to plan.
There are a few additional psychological benefits to this:
1. It’s something practical that will inevitably help soothe the nervous system.
2. This is an opportunity to reflect on this part of your life and acknowledge its impact; demystifying and destigmatising the process of managing money and hopefully challenge the assumption that this is ‘too much’ or ‘too big’ for you to tackle.
3. It offers the opportunity to reflect on your values and assess how current spending patterns may/may not align with what is important to you.
4. It offers opportunities for some self-compassion, to get curious and some information about just how much of what is happening is within your personal control and what is outside of it. This will also challenge the judgmental, critical, minimising or dismissing self-talk that many people often go through when feeling stressed about money.
Being able to engage with a regular practice that facilitates an internal dialogue about money, spending and responding to the stressors involved is not only courageous but is likely to inspire longer lasting and more meaningful changes to money management and spending habits.
Understand your script
Take some time to unpack your personal scripts. When talking about money, sex and relationships, every person usually holds several ‘scripts’ that can be triggered a played out almost unconsciously.
Not every belief or script may make logical sense, certainly some of them may feel confusing or conflicting to acknowledge since they may not align with how you prefer to live life, but it’s important to take the time to think about them and how they show up. This kind of awareness raising is also helping to gather information to help understand your triggers and how to respond.
Reaching Out for help
Through your own support network
Since money stress can be shrouded in shame, self-blame and isolation; reaching out to trusted people in your own support network or a professional can be incredibly helpful. Not only to de-stigmatise the challenges being faced but we can take small steps toward support, connection, and skills that help us regulate rather than react. Take some time to reflect on who is in your support network and consider who may feel safe or safe-enough to start to bring in to have this conversation considering the kind of support you feel you need; whether it be practical, emotional or just someone who gets it.
Professional Supports Available
When it comes to money matters, professional help can take several forms depending on where you are at and the level of support needed. It may involve:
· Using the financial hardship phone lines of various services
· Speaking with a financial counsellor – these are specialists at working with financial challenges and can provide practical solutions, support your financial literacy and help process the emotional impact of financial stress.
· Accessing therapy generally; say you have pretty good financial literacy but find yourself feeling overwhelmed despite knowing you have the skills to address the issues or if you find money matters are having an impact on your relationship and feels beyond your personal control to manage; accessing support for your mental health or relationship could still be a valuable avenue. Accessible and affordable options may be available through accessing a Mental Health Treatment Plan, speaking with your GP and EAP support.
Finally, if you feel as though your own financial knowledge could do with a refresher – just to make sure you’ve thought of everything – consider picking up some financial advice books, listening to podcasts by financial experts and advisors or reviewing free resources available on MoneySmart.
As we move through the festive season and into a new year, it’s important to remember that financial stress, relationship strain, and emotional overwhelm are not personal failures but predictable human responses to complex social and economic pressures. The intersection of money, mental health, intimacy and identity is not always easy to navigate. Raising awareness, practicing self-compassion, grounding, and having honest conversations with supportive people can help break cycles of shame and isolation that keep people stuck.
This season may still carry its challenges, but you do not have to shoulder them alone—and within that truth lies the beginning of real relief, real change, and a gentler way forward.
