Key Takeaways
Financial stress is a common issue and can lead to anxiety, depression, sleep issues, physical health issues, and strained relationships.
Couples are often not financially aligned when they first seek financial advice. A well-constructed financial plan with regular accountability checks can help.
Working with a therapist can be as beneficial as working with a good fiduciary financial planner.
Financial stress can significantly impact your mental health. Understanding the sources, recognizing the signs, and implementing practical strategies can help maintain both financial stability and mental well-being.
The Impact Of Financial Stress
Financial stress is a leading cause of anxiety, health issues, and strained relationships. It manifests in various ways, including:
Financial Dependence: Retirees often struggle with family dynamics and equitable distribution of wealth to future generations.
Insufficient Savings: Individuals with high incomes and significant assets often fail to invest effectively, thus jeopardizing their financial goals.
Common Issues And Their Effects
Strained relationships are one of the first things we notice in people with financial stress. You can see it in their body language and in how they talk to their spouse when they come to the initial meeting with us. Often, they come right out and tell us: “Hey, I'm losing sleep over my finances. It's constantly on my mind and it's upsetting me.”
We also ask new clients if they have any chronic health problems that we need to be aware of when constructing their financial plan. Most people are open with us about their health issues. They want to unload some of the anxiety they’ve been keeping bottled up inside. Often people are ready to talk about it with us and clearly, they want someone to listen to them.
Couples frequently start seeking professional financial advice when they’re in their early- to mid-fifties. This is about the time they start wondering why their good income hasn’t translated into more savings. The financial stress this causes often strains relationships, causing sleep loss, constant worry, physical symptoms, and avoidance behavior.
Family relationships are often a source of financial and mental stress as well. Our clients frequently want to pass their wealth and values to future generations. However, they’re unsure about how to do so equitably and in a way that empowers the recipients instead of crippling them.
In my experience as a board member at Center at 353, I’ve heard firsthand stories about how financial stress can lead to mental health issues. We are fortunate to have a resource like Center 353 in our community that can provide such a high level of care.
Addressing Financial Stress
At Novi, clients often joke with us in meetings: “Wow, you guys are great therapists.” While we are not licensed mental health professionals, we take that type of comment as a compliment. It means our clients recognize that we listen to them and ask the right questions.
A thorough financial plan can alleviate stress. Clients often realize they have the foundational
elements for a solid plan but need guidance to make the right decisions. By aligning couples financially and by holding them accountable, we can reduce stress and improve their outlook. For example, helping clients balance immediate desires (i.e., a family trip) against long-term goals (i.e., retirement), can empower them to make better-informed decisions. This reduces stress and enhances their overall well-being.
Practical Solutions For Dealing With Financial Stress
Seek financial counseling from a professional fiduciary advisor.
Communicate openly with loved ones.
Set realistic financial goals.
Use stress-reduction techniques (square breathing is a personal favorite).
Limit exposure to financial triggers.
Focus on positive financial achievements and build on them.
Consider therapy for mental health support.
Conclusion
Addressing financial stress can improve your financial situation, mental, and physical health. You don’t have to navigate this journey alone. Consider collaborating with a fiduciary financial advisor to guide you. Why not enjoy the peace of mind that comes with informed decision-making?
Additionally, for those in central New Jersey, Center at 353 in Princeton offers accessible therapy services to support your mental health.
RYAN M. VOGEL, CFP® is the CHIEF PLANNING OFFICER, PARTNER at Novi Wealth
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