Financial Stress Isn't Always Bad

Many college students, at the end of their teenage years or just into their early twenties, are on their own for the first time. They are starting to get a sense of what the world looks like with less parental guidance — and more financial freedom. But that freedom can be stressful. For many college students, financial stress adds layers of complication to their existing anxiety about classes, midterms, papers and on-campus living. And of course, too much financial stress can impact students' academic performance, mental health and social life.

But there can be value in actually increasing an individual's level of financial stress. A graduating engineering student with $50,000 of debt, who has pinned down future employment with a management consulting firm, may just need some gentle coaching and a calming influence to help deal with any money worries. On the other hand, a second-year student with an undecided major and mounting debt might put off planning for her financial future and start racking up credit card debt. She may figure that she is in debt up to her eyeballs anyway so a few more Uber rides, dinners out and iced caramel lattes won't make a big difference. Helping her to build an awareness of her financial standing can be a catalyst for behavior change. Otherwise, it might be difficult for her to see the ramifications (both short- and long-term) of the debt that she has accumulated until she leaves school and is out on her own. While too much stress is debilitating, some stress can be productive.

That's where financial coaching can be valuable. Take the Ohio State University's (OSU) Scarlet and Gray Financial (SGF). Housed in the OSU Student Life Student Wellness Center, SGF helps students on the cusp of financial independence manage stress through a personalized goal-driven financial process. This process encourages the development of action steps to move students toward financial awareness and behavior change. SGF's just-in-time component builds interventions into critical points of a student's life, such as helping them get information as they are deciding whether or not to apply for an emergency loan. Additionally, there is a check point in a student's second year where SGF can provide a financial checkup for the student.

So how do you moderate financial stress when students are facing a major financial hurdle? When a student comes to SGF having significantly over-borrowed during their first or second year, overwhelming the student with the magnitude of the problem may put them into an unhealthy panic. Slowly easing them into an awareness of their debt and a plan to move forward is key, and ideally, the coach builds a long-term relationship working with the student to do that. This comes from establishing trust with the student and developing a relationship deeper than just finances. Finances are a very difficult topic to discuss, and time is therefore spent initially talking with the student about less anxiety provoking topics to gain their trust.

While there has been significant attention paid to the negative impact of financial stress, less attention has been paid to identifying the appropriate level of financial stress and its role in financial decision making. Colleges can present great case studies to understand financial stress. Not only do they demonstrate how financial stress may negatively impact student success, they can also show how increasing financial stress can help students develop healthy financial attitudes and behaviors. A healthy amount of stress can help students make smarter, more proactive and more realistic financial choices in the present and become more resilient to financial pressures in the future.

Bryan Ashton is an Assistant Director within the Student Life Student Wellness Center, overseeing financial education and outreach, Scarlet & Gray Financial peer to peer financial coaching and additional functional areas in the SLSWC.

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