When wealth advisor Alonso Rodriguez Segarra recounts his most acute memories of inflation in his home nation of Venezuela, he recalls starving residents in the capital, Caracas, waiting anxiously behind a restaurant he had just left. Once proud Caraqueños (residents of Caracas) were hoping to scavenge that night’s meal from the restaurant’s waste. Segarra says he could “write a book” of heartwrenching stories with common themes: Suicide, indignity, and desperation.
Struggling with their unchecked inflation, Americans can witness in Venezuela the shocking conclusion of a rapidly declining currency. They will see not just the financial outcome of extreme inflation but the humanitarian endpoint, too. Americans must ask whether they should view individuals like Segarra—with firsthand accounts of inflation’s capacity to devastate—as canaries in the coal mine.
The even more pressing question is, how can Americans insulate themselves from its financial and psychological toll if inflation continues to rise?
Like America, Venezuela Was Once a Wealthy Nation
There was a time when most Venezuelans took their meals, steady paychecks, and giving nature for granted. As a nation blessed with diamonds, gold, iron ore, and, most importantly, oil, Venezuela had the fourth-richest GDP per capita in 1950. As recently as 2001, it was the wealthiest nation in South America. For many Venezuelans, life was comparatively good even as inflation became a problem in the early 1980s.
The picture today could not be starker. While all of Latin America has historically low suicide rates, the per-capita suicide rate in Venezuela rose from 3.8 per 100,000 inhabitants to 8.3 per 100,000 inhabitants between 2015 and 2017, when the inflationary crisis was at a fever pitch.
As Segarra explains, indignity is a daily occurrence for many who remain in Venezuela today.
“We have a relative who, despite having worked all his life and having a postgraduate degree from a prestigious university in the USA, had to ask his relatives for help to be able to eat,” Segarra recalls. “He did not have the equivalent of 20 dollars.”
Financial insolvency, hunger, and desperation are the reality in Venezuela, each resulting from rampant inflation. And yet, the memories of the might of Venezuela’s finances remain fresh. This rapid economic descent underscores why some Americans may view Venezuela as a warning signal rather than an impossibility.
The Current State of Mental Health in Inflationary America
The United States has long had higher-than-average rates of suicide and related mental health problems, with the Boston University School of Public Health reporting a 35% increase in the American suicide rate between 2000 and 2018. Despite two years of falling suicide rates in 2019 and 2020, the Centers for Disease Control and Prevention (CDC) notes that the rate began rising again in 2021.
Data suggests that inflation will only exacerbate this alarming trend, especially for those who do not take active measures to maintain financial and mental well-being.
The connection between unemployment (i.e., financial insecurity) and mental health deficits is well-established. The Journal of Vocational Behavior found in 2009 that 34% of unemployed individuals experience mental health problems like depression, distress, and anxiety, while only 16% of employed individuals experience such symptoms.
Another key distinction that bodes poorly for America’s mental health outlook: Venezuelans have left the nation in droves, recognizing greater economic opportunity across the border in countries like Peru, Colombia, Brazil, Chile, and Ecuador.
Americans, though, are supposedly living in the most prosperous country in the world. This once-comforting truth could now heighten feelings that economic hardship and related mental health problems are inescapable.
Actionable solutions for psychological and financial relief have never been more valuable.
Mental Health Experts’ Inflationary Prescriptions
Experts recommend taking active measures to fortify and improve psychological and emotional well-being during times of financial uncertainty. Budgeting alone is often insufficient to ease stress and anxiety during inflationary periods.
Zak Pym Williams, who lost his father, Robin Williams, to suicide in 2014, understands the potential for sudden hardship—like losing a loved one unexpectedly—to compound existing financial, psychological, and emotional burdens. As many Americans feel the constant weight of financial pressure, they may be only one stressor away from depression or even suicide.
“Stress [from grief or other sources] makes it difficult for the individual to think clearly, cope with day-to-day tasks, and make sound financial decisions. Expanding upon this, the financial burden of managing a loss can intensify existing feelings of loss, grief, stress, anxiety, and depression,” Williams explains.
Williams, who owns a company (PYM, or Protect Your Mood) using dietary amino acid therapy to promote mood regulation, takes a biological approach to help others manage inflation-related stress. Williams also recommends resetting financial expectations to mitigate feelings of shame or failure related to financial problems.
“It’s important to remember that inflation is an ongoing economic condition that affects people differently, and it’s essential to manage expectations and maintain perspective when it comes to one’s financial situation, and to reach out for help if needed.”
Dr. JD Friedman, Clinical and Sport-Performance Psychologist at Baker Street Behavioral Health, suggests social connection and physiological techniques as antidotes to financial stress.
“[During times of financial uncertainty], it becomes particularly important to utilize social coping strategies and techniques, such as seeking support from friends and family and through one’s faith,” Dr. Friedman explains. “Learning ways to help ease the strain on the body through stretching, basic exercise, and deep breathing may also provide immediate benefits.”
For most, the inflationary self-care regimen will also require a sound personal financial strategy.
Financial Tips To Minimize Financial Stress
Americans losing their homes, bypassing essential items at the grocery store, or enduring the helplessness of unemployment may find little relief in legislation aimed at dulling the pain of inflation. Most strategies for getting financial relief fall to the individual.
Regarding inflationary financial advice, what has always worked still works, but the stakes are higher. Increasing income while decreasing spending is the guiding principle. Segarra advises accepting gig work or even a second job if you can, as a looming recession could eliminate many opportunities available now.
“You have to cut spending and raise income, either with another job or looking for a position where you can earn more, taking advantage of the fact that there are still many job vacancies in America,” Segarra explains.
The Associate Press reported 10.46 million vacant jobs in November 2022, or 1.8 jobs for every unemployed American. While those who already have a job may be pickier in choosing secondary or tertiary work, now is the time to double (or triple) up on income. With virtually unanimous predictions of a recession in 2023, Americans could soon regret not padding their bank accounts while the opportunity is available.
Debt also burdens Americans, with the average household owing $155,622. Now is the time to tighten the belt and address outstanding debt, as the income streams of today may not be there in a matter of months. If the specter of high-interest debt looms large now, it may become unbearable should one’s financial situation worsen.
Furthermore, while buying items in bulk may seem counterintuitive, as experts advise spending less, the increasing cost of goods means that buying essentials in bulk may save you money in the long term.
How Americans Can Protect Themselves Now
Even if Venezuela-level inflation remains far off for America, the economic forecasts for 2023 are dour. Americans who want to insulate themselves from inflation’s financial and psychological ruin will take active steps—working and saving more, spending less, and finding sustainable and healthy habits to promote mental health—to combat widespread financial insecurity.
And, when those Americans face the temptation to revert to overspending or neglecting their mental health, they might just need to remind themselves of Venezuela.
This article was produced and syndicated by Wealth of Geeks.