Financial stress is real - and it’s taking a toll on New Zealanders’ mental health

According to the Financial Services Council’s 2024 Financial Resilience Index, 70% of Kiwi now worry about money daily, weekly or monthly - the highest rate since 2020¹. The main culprits? High inflation, climbing interest rates, and a growing uncertainty about job security.

These economic factors are having a profound impact on our mental health. In this article, we explore the causes for and impacts of money worries, and ways to reduce financial anxiety to boost your mental health.

Living costs continue to rise, and for many households, that pressure is hard to ignore.

Stats NZ reports that the cost of living for the average household rose 3% in the 12 months to December 2024, and by even more for those most vulnerable. Beneficiary households saw a 3.3% rise, while superannuitant households faced increases of 3.6%².

More New Zealanders now report having personal debt (up 6% from last year), and a growing number say they’d only be able to maintain their current lifestyle for a month or less if they lost their job. Even retirees aren’t immune, with one in five saying they have less than a year’s worth of savings to fall back on³.

Financial anxiety can show up in various ways, including excessive worry, negative thoughts, insomnia and loss of appetite. It can also lead to burnout.

The 2024 Wellness at Work report by Employment Hero found that burnout is rising, now affecting 61% of Kiwi workers which has increased from 53% in 2022. Nearly a third of employees cited the cost of living as their biggest stressor. Gen Z respondents were hit particularly hard, with 70% saying they had experienced burnout in the past three months⁴.

That stress can be physical (tiredness, sleep issues), emotional (anxiety, guilt), and behavioural (withdrawing from loved ones or using unhealthy coping mechanisms). But while the causes might feel out of our control, there are practical ways to lighten the load.

Let’s be real, talking about money can be hard. Many of us feel whakamā (shame or embarrassment) about asking for help, even though opening up is often the first step towards feeling better and discovering you’re not alone. 

Sorting out your finances might take time, but there are practical steps you can take to ease the mental load.

• Look after yourself: Take care of your mind and body. Do things you enjoy. Whether it’s going for a walk, catching up with a mate, or simply breathing for 30 seconds, small moments of self-care really do add up.
• Talk it out: Share your worries with someone you trust like a whānau member, friend, or a financial mentor. Services like MoneyTalks offer free, confidential advice, and help create a plan that works for you.
• Make a budget: Even a simple budget can give you clarity and control. Use tools through Sorted or Goodbudget to track your spending and plan for what’s ahead. You could also try Pocketsmith for forecasting and scenario testing.
• Prioritise the essentials: Focus on food, housing, utilities and medical care. If you’re struggling, contact your bank, utility provider or a community service. Many offer hardship support.
• Know where to go for help: For emotional support, you can call or text 1737 any time to talk to a trained counsellor⁵.

Financial stress is tough, but it’s something many of us are facing, and no one should feel they have to navigate it alone. Whether you’re just starting to get on top of things or feeling completely overwhelmed, there are tools and people ready to help.

Taking a small step, like making a budget or sending a message to a friend, could be the start of reducing your financial anxiety and supporting better mental health.