Millennial Money: Sneaky ways burnout hurts your bottom line

Amrita Jayakumar

AP – Millennials are a burned-out bunch. Millennial workers are more likely than older generations to report being burned out at work, according to a 2018 Gallup study.

The gig economy, the temptations of social media and the high expectations millennials have of themselves contribute to this trend, behavioural finance experts said.

“Millennials have this double whammy of anxiety coupled with a really strong work ethic,” said Kit Yarrow, a Consumer Psychologist and Professor Emerita at Golden Gate University.

“Before they even get started, millennials approach their tasks in life with a (base) level of anxiety, which depletes their resources for managing stress.”

This is not to say “adulting” is especially difficult for this generation, or to assume that all millennials are struggling. But understanding how burnout harms financial decision-making can help you or a loved one break through it and achieve goals.

BURNOUT TRICKS THE MIND

Burnout isn’t the same as stress. The World Health Organization (WHO), which added burnout to its handbook of recognised health conditions this year, said symptoms include “feelings of energy depletion or exhaustion; increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job; and reduced professional efficacy”.

Burnout is linked to your job, but it can also affect your financial decisions outside of work in the following ways:

YOU PAY MORE FOR CONVENIENCE – You could be spending money regularly on takeout, Uber rides or grocery delivery, for example. People are often willing to pay more for convenience because they’re exhausted — from working long hours or being available for work all the time — and because it makes mundane tasks easier.

YOU SPLURGE AS A REWARD – “Treat yourself” isn’t just a hashtag; it can be a coping mechanism. When it comes to rewarding ourselves, “Our mind tricks us into taking us off the hook,” Yarrow said.

“You might think: I already have student loans and credit card debt and my rent is half my income so I might as well go out and eat, because what difference will it really make?” Stevens said.

Social networks and the ease of online shopping make it harder to resist temptation, said Co-founder of the Common Cents Lab Mariel Beasley, a behavioural science research lab at Duke University that focusses on improving financial well-being for low- and middle-income households.

HOW TO BREAK THROUGH BURNOUT

You can’t fix the economy or wish away debt. But by recognising burnout, you can make things easier on yourself. Here’s how:

KNOW YOUR “WHY” – Your values motivate you when you’re paying off debt or saving money for a dream vacation.

They can also help you prioritise what you’re willing to spend money on and cut back on.

Values aren’t the same as goals. Paying off a credit card is a goal, but achieving financial freedom is a value, Stevens said.

BUDGET STRATEGICALLY– Budgeting isn’t about cutting out the small things that give you joy, like the occasional Uber or your latte habit.

Taking a big step to save money — think moving into a cheaper living situation, refinancing your student loans or cancelling subscriptions — is more sustainable in the long run than, say, resolving to eat out less, Beasley said.

“Every day when you’re making a decision to spend less, it’s hard to keep going,” she said. “We naturally bounce back to our old habits.”

After you’ve identified your values, a budget is a tool to help you live them.

CHANNEL MONEY MOTIVATION

When you’re feeling motivated, take a one-time action that will save you effort, Beasley said.

Set up a small transfer — perhaps five per cent of your income — to a savings account so the money is out of sight, out of mind.

Or cut up a credit card (but don’t close the account) to make it a little harder — but not impossible — to buy things you don’t value.