Allan Law


Firm Announcements and Law Updates

Planning for and Coping with Financial Stress

Today I welcome a contribution from freelance writer, Jenny Holt.

Planning For and Coping With Financially Tough Times

Poor financial planning can have immense lifestyle and legal implications. The outright cost of going into debt, failing to keep up with payments, and going through a painful contested divorce are well known. However, it is worth remembering that not accessing the correct legal aid, letting stress overwhelm you, and making poor financial decisions will compound these problems. The biggest element perpetuating a cycle of poor decisions is stress. It affects both body and mind. This is why it is important to understand the causes of financial stress, its effects on the person, and how to cope with it to plan a way out of difficulty.

Leading Causes of Financial Stress

Research in this country has led to a better understanding of what factors lead to financial stressin people of all ages. The most financially stressed tend to be adults in their 30s and 40s, who are trying to raise a young family while paying off a mortgage on a home. Senior citizens over 55 also tend to have stress when something goes wrong because there are less financial levers for them to pull. The main causes of financial stress are:

  1. 43% do not save money

  2. 25% spend more than they earn

  3. 17% fail to keep to a budget

  4. 17% have accumulated debt

  5. 16% are unable to pay off their monthly credit card bills

Leading Causes of Financial Stress for Seniors

Across the border in the United States, the top financial stress causes are:

  1. Job Loss/Reduction – 51%

  2. Healthcare – 29.5%

  3. Other – 21.6%

  4. Unpaid Taxes – 12.7%

  5. Divorce/separation – 8.2%

  6. Bankruptcy – 6.7%

  7. Foreclosure notices – 5.7%

In Canada, healthcare is unlikely to be a leading cause of financial stress, though health can cause many stress-related issues. Foreclosure notices are also less likely here. Of the others, job loss and reduction, unpaid taxes, divorce, and bankruptcy are just as likely to trigger financial issues; especially if combined with the typically Canadian causes noted above.

For senior citizens across the country, financial stress can be heightened by poor estate planning, which can lead to family friction, difficulty in dividing assets, and an inability to afford a decent funeral. No one likes to think about the end, but it is something which needs to be planned for.

The Mental and Physical Effects

Being financially stressed will have adverse effects on a person’s health and mental wellbeing. This includes tight chest and heart problems, weakness to colds and viruses, headaches, lethargy, depression, anxiety, anger, panic attacks and more. It will exacerbate any existing medical conditions too. For many, becoming financially stressed can lead to a cycle of ill health, poor mental health, and bad decision making under stress which leads to more financial difficulties.

Coping with Financial Stress

There is a two-fold approach to coping with financial difficulty and its health effects. The first one is to relieve the stress through improved physical and mental health. While it will not deal with the problem directly, it will make it easier to make smart decisions. This can be achieved through exercise, better diet, and meditation. This leads on to the real fix, finding a financial solution to the problems. These solutions can be found through financial services such as restructuring, downsizing, and so on. However, they can also be found through new work, family law settlements, amicable divorce resolution, and other legal resolutions with debt holders.

This has been a guest post by Jenny Holt.  Jenny Holt  is a freelance writer and mother of two. She loves nothing more than getting away from it and taking her pet Labrador Bruce for long walks, something she can do a lot more now she’s left the corporate world behind.

UncategorizedJason Allan