PPS Cognition 3 - Page 4

CAN FINANCE AFFECT YOUR MENTAL HEALTH? M any young South African professionals who have settled into their first jobs tend to overspend their earnings without realising the consequences for the future. The eventual result can be financial uncertainty, causing severe stress which can trigger a mental health issue. As a young professional, your aspirations are to buy yourself a nice car, move into an apartment and upgrade your lifestyle. Once you start to make purchasing decisions, debit orders start to go off your account and you may have a limited amount of money left to see you through the rest of the month. Currently, the South African economy is facing continued distress and the cost of living is likely to keep rising. This may bring additional debt into the equation, i.e. more money gets deducted from your bank account. To meet the pressure of having to stretch your budget, you may decide to take short-term loans, purchase goods using your credit card or shop on credit using your store cards. Unfortunately, this eventually reaches breaking-point where you are unable to see the wood for the trees with levels of high debt leading to psychological and financial pressure. High debt often triggers constant stress, sometimes accompanied by anxiety or depression. Furthermore, stress can lead to other conditions such as insomnia, social isolation, loss of concentration at work and even non-communicable diseases in the long term such as high blood pressure. According to a research report on Financial Reality by DebtSafe, about 40% of respondents said that financial distress affected their sleeping patterns while 29% said that it impacted their decision- making processes. These conditions can result in poor work performance and have a knock-on effect on promotions and bonuses. In observation of Mental Health Awareness Month, PPS suggests the following three critical steps in addressing mental stress stemming from poor financial management. PREVIOUS PPS | COGNITION | EDITION 3 | MAXIMISING your finance for today Start a savings account Develop a financial budget Financial planning Young professionals are advised to start saving if they have not yet considered it. It doesn’t matter how much you save per month, but it should be a habit you establish easily in your working life. Research from the PPS Graduate Professional Index shows that on average, 74% of 6 000 respondents consider themselves to be savvy when it comes to savings and investment matters. If you want to manage your finances properly, create a financial budget. This will help you to identify if your expenses are greater than your income. A budget also allows you to take control of your finances and provides guidance on how much you spend on an item, what items are needed and what items can be eliminated. This will alleviate stress by putting you in control and ensure that you spend money more cautiously. Drawing up a financial plan will assist with understanding what your short- term and long-term goals are and how your finances can be managed. According to the PPS Graduate Professional Index, respondents were asked if they have a financial plan in place or if they simply own a combination of financial products. On average 51% of 6 000 respondents indicated they have a plan, while 3% have nothing in place. Saving enables you to become financially secure and prepared for a financial emergency. For example, if your car breaks down, you know that you have the finances available to afford the repairs. You do not have to wait until you get your next salary or take a loan. If you are struggling to manage your finances, seek advice from a financial adviser. A financial adviser will be able to help you find ways to reach your financial goals sooner, provide guidance on financial de- cisions, reduce costs and eliminate debts. It is also recommended that you invest your savings to meet long-term goals, so you are able to live more comfortably after retirement. Investing is putting money into financial instruments with the aim of growing it. There are various ways to go about investing including putting money in unit trusts or investing directly in shares. 02 04 At PPS, our qualified financial experts will provide tangible advice exclusively to graduate professionals that will add real value towards your financial security and help you live the life you deserve to live. Rate this Article Queen Mokoena PPS Financial Adviser 03 05 NEXT PPS | COGNITION | EDITION 3 | MAXIMISING your finance for today