Dr Jaime Lee: How to support your mental wellbeing during the rising cost of living

ARTICLE

1 May 2025

3 min read

You’re seeing it everywhere in the media; rising interest rates, inflated petrol prices and the supermarket squeeze on everyday staples.

It’s a hard pill to swallow, but the rising cost of living can impact our mental health (and our wallets) significantly – some of us may already be feeling the pinch. But it’s not all doom and gloom; here's how we can roll with the punches and adapt to the new normal.

Maslow’s hierarchy of needs

To better understand how the rising cost of living affects our mental health, let’s look at Maslow’s hierarchy of needs¹ which suggests that each layer in this 5-level hierarchy (starting from the bottom) needs to be fulfilled before the next can be met.

The rising cost of living primarily affects our financial stability, which links to our physiological and safety needs. Our autonomic nervous system is constantly scanning our environment assessing and responding in service to survival. It’s listening for cues, asking, “Am I safe? Or am I in danger?” and responds moment by moment.

The rising cost of living and risk of financial instability will often be perceived as a ‘threat’ and activates our sympathetic nervous system in response. We want to either fight this threat, or we want to run away. Since this is an ongoing issue (and for the foreseeable future), rising living costs has become a source of stress, which can lead to mental health issues. And according to Maslow’s hierarchy, some people won’t be able to fulfil their other needs like belonging, esteem and self-actualisation – especially people already in disadvantaged situations.

5 ways to bolster your mental wellbeing

While the cost of living may be outside of our control, there are steps we can take to protect our mental health during these challenging times.

Get moving. Whether it's a brisk walk, a yoga class, or a dance around the living room, physical activity is a great way to reduce stress, release endorphins and boost our mood.

Breathe. Taking a few minutes each day to practice mindfulness can help us stay grounded. Focusing on our breath or doing a body scan can calm the mind and reduce those overwhelming feelings. AIA Vitality members can earn Points through the Mental Wellbeing Benefit through supported mindfulness apps: Headspace, Calm, and Buddhify.

Connect. Isolation can amplify stress. Staying connected to friends and family, whether it’s a quick chat or a fun day out, can combat feelings of isolation, by helping us feel supported and seen.

Professional Support. If the stress of finances is overwhelming – speaking to a mental health professional can help give you the support and strategies to feel ok again.

Planning. Financial stress often stems from uncertainty about the future. Creating a clear financial plan, setting small achievable goals, and tracking progress can help you regain a sense of control.

Aim to build resilience

In recent years, we've all faced turbulence, reminding us that change is constant. A flexible autonomic nervous system is key to improving mental health. Resilience comes from being able to shift between stress and safety with ease. By recognising how our nervous system reacts, we can take small steps to return to a state of recovery, building resilience and strengthening our overall mental wellbeing.

Looking for Financial Wellbeing advice?

At AIA Financial Wellbeing we’re passionate about ensuring Australians have access to affordable, reliable, straightforward financial advice - because we understand how financial wellbeing supports your overall wellbeing. No matter where you’re at, we’re here to support you.

If you are experiencing distress and are in need of free mental health support, please visit:

Lifeline Australia (24/7 Crisis support)
13 11 14

Beyond Blue (Mental health support and information)
1300 22 4636

Footnotes

¹ https://www.simplypsychology.org/maslow.html

Dr. Jaime Lee

Dr. Jaime Lee is the Founder and CEO of Health Quotient, a company dedicated to transforming workplaces around the world by inspiring individual health and whole organisational renewal through leadership keynotes, workshops and mentoring. With experience as a medical doctor, public health specialist, corporate strategist, speaker and facilitator, Dr. Jaime works with global companies to help them sustain high performance teams in an integrated and healthy way.

Disclaimer:
Copyright © 2025 AIA Australia Limited (ABN 79 004 837 861 AFSL 230043). This is general information only, without taking into account factors like the objectives, financial situation, needs or personal circumstances of any individual and is not intended to be financial, legal, tax, medical, nutritional, health, fitness or other advice. The source information of the articles is current as of the date of publication and may be subject to change. While the information contained herein is believed to be accurate, AIA Australia expressly disclaims any and all liability for representations or warranties, expressed or implied, contained in, or for omissions from, the information.

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