What the cost-of-living crisis really means for mental health.

As the cost-of-living crisis continues to hit our wallets, more and more people are forgoing essential services to survive. 

According to Lifeline, there’s been an increasing number of calls for help, from people with more complex problems than ever before.  

Mamamia spoke to Anne Holmes, a financial counsellor at Lifeline in Sydney, to understand how spiralling prices are impacting demand for their services.  

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Why do people reach out for help?

“They usually present with something that's just the beginning of unravelling their problems,” Anne said. “It might be something like, ‘The strata body is chasing me and I don't know what to do’, or it might be that they’ve had a car accident and aren’t insured. That's really telling you that they’ve cut back on a lot of those essential items. 

“So they may present with one thing but once you start talking to them, it's ‘Oh yes, my mortgage is behind’, ‘I'm struggling to pay my rent’ or ‘I've got schools chasing me about school fees’. And then when you dig deeper it's, ‘Well you know, I'm not necessarily getting my medicine’, ‘We're not eating three meals a day’ or ‘We're trying to cut back on food’. 

“I don't think they really realise that it's an overall issue and it's one thing that brings them in – one thing that tips them over into thinking, ‘I'm not coping’, but it's actually more general than that. It's just that they’re spending more than they bring in.”

How has this changed over the last year?

“The people we're seeing have possibly never sought help before, because they've never been in this situation,” the financial counsellor said.

“They're quite often employed, whereas previously a lot of people we saw had lost their jobs, but we don't have that problem anymore because it's fairly full employment. Plus, now people are not paying for essential things like keeping a roof over their head or paying their electricity bills. 

“People don't know what's available out there to help them, because they’ve never had to go to their bank and say, ‘I can't pay my mortgage’. They don't know what a hardship arrangement would entail and they're embarrassed that this is what's happening to them because it's never happened before.”

Has demand for your services gone up?

“During COVID it was very quiet and we thought, ‘It's going to ramp up like a tsunami’, yet never did,” said Anne. “But now agencies are really pushed with people. Some areas more than others.

“For example, some areas of south Sydney where young couples have just bought houses and haven't had their mortgages for very long are genuinely more impacted, while Western Sydney is frantically busy for that reason.

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“A lot of the people we see are victims of domestic violence and those sort of cases are around all the time, but those cases have definitely increased since COVID and we've seen a lot more. But that could be because people are recognizing what domestic violence is and seeking help, so it's hard to know whether that has gone up or whether it's just that people are willing to come out and look for assistance.”

How do you access each client?

“One of our best-telling factors is to do a money plan with somebody because it tells them what they’re spending, and it tells you a lot about the person as well,” she said. 

“For instance, they might have a gym membership but they're not going to the gym and now the gym is chasing them but they haven't done anything about trying to get rid of that membership. 

“Or it might be that their strata body is chasing them or the council, and they’re a long way behind in paying their council rates. It could be that they've got an eviction notice because they haven't paid their rent. Or credit card. Payday loans have also become a huge problem for many of our clients because it's sort of a last resort way of getting money. It's easy to get, it’s not easy to pay off and that's the big problem.”

What help do you provide?

“It depends on what a client's situation is, but we will always approach their bank or the creditor and ask for a period of time to work out what are they going to do going forwards,” Anna said. 

“Quite often it can be that they just need a bit of time to reflect on their situation, get their priorities right and then they can go on. They can manage. But more and more, people are struggling. The other day I had a client who had 13 hardship variations with her mortgage in the last five years and was almost begging for another one. And a lot of our clients are single mothers on one income, and they're battling. They're really struggling.”

“Often, the first thing we do is actually make them feel like we're listening but also make them feel like we’re concerned about their mental health. One of the first things I ask a client is whether they are safe, whether they have had any thoughts of suicide recently or previously, just to work out whether there's a risk there and then if there is we deal with it before we do any financial issues. 

“Keeping the client safe is the most important thing and that has become more of a problem and more common for us, in that what we see now. The clients are now much more complex than they were years ago. You might have someone with a lot of debt who is experiencing domestic violence while being evicted from their home, and you've got to work out where you're going to start.”

If anyone is experiencing financial stress, you can get in touch with Lifeline to make an appointment with your local financial counselling service, or call the National Debt Helpline on 1800 007 007. 

Image: Getty + Mamamia.