Financial Stress and Wellness

by Jeffery A. Keill, CFP,CIM,FMA,FCSI, Senior Wealth Advisor Keill & Associates- Advisory Team

Let’s face it- times are tough for many people. Even for the common ostrich, I am sure. Those who seem to be doing great may not be. Those that seem to have it altogether may have a house of cards that they worry will fall with the slightest breeze. As a Wealth Advisor over the years I have had the opportunity to sit across the desk, kitchen tables, living rooms, hospital beds, boardrooms and retirement homes, with thousands of individuals and families discussing financial goals and the obstacles that stand in their way.

Financial stress does not discriminate between age, sex, faith, race, profession, or any of the other descriptors that humans seem so desperate to label each other. In this Serious Money Brief Discussion Paper I would like to look at Financial Stress, it’s impact, and most importantly some ways to overcome or lessen it. After all, the end of our Mission at Keill & Associates states”.... so busy families can live their dream free of financial worry.”

Three Pillars of Wellness

Mental, physical and financial wellness are three pillars of good health. But for many Canadians, money worries are the greatest source of stress, more than work, personal health and relationships. In fact, the Financial Consumer Agency of Canada states:

• Financial worry caused 48% of Canadians to say they’ve lost sleep

44% of Canadians say it would be difficult to meet their financials obligations if their pay arrived late

Where does Financial Stress Occur?

The reason why financial stress on families and individuals knows no bounds is because it can occur in many places, such as:

• Managing monthly household expenses

• Coping with the burden of high levels of debt

• Having a narrow margin of income to expenses leaving people living pay cheque to pay cheque.

• Finding it impossible to save money for short and long-term goals or upcoming expenses

• Coping with sudden shock of unexpected expenses

I can assure you that if you have or if you still do feel these stress points, you are not alone.

How does Financial Stress Impact Your Family

Financial stress can have a profound impact on families, affecting both their emotional well-being and their physical health. The consequences of prolonged financial strain can have lasting impact on family life, parenting, and intergenerational financial stability. Here’s an overview of what Keill and Associates feels are impacted by financial stress:

1. Emotional and Mental Health

2. Anxiety and Depression: Financial difficulties are one of the leading causes of anxiety and depression in adults. Constant worry about paying bills, job security, or meeting basic needs can lead to chronic stress, which in turn may lead to mental health issues. Not only does it create a sense of anxiety in adults but it can dramatically change or fix their children’s relationship with money. A common point that our Teams Money Coach, Jeri Bitorf talks about often.

3. Sense of Capitulation: Financial stress often brings feelings of powerlessness and hopelessness. Getting to a deep point of stress will lead many to a sense of capitulation and simply giving up the struggle. Family members may feel trapped in a cycle of debt or uncertainty, leading to emotional burnout.

4. Marital Strain: Financial issues are one of the most common causes of marital conflict. This is evident in our many discussions with couples over the years seeking advice on ending a marriage or relationship with their partner. The stress of managing finances can lead to arguments, resentments, and even divorce in some cases.

Disagreements may arise about budgeting, priorities, or who is responsible for what. Often, it is not the money stress on its own but money can be an area where other underlying issues arise.

2. Impact on Relationships

• Communication Breakdown: Financial stress can impair communication within the family unit. Parents may hide their financial worries from children or may not know how to talk about money in a productive way. This lack of communication can create a divide between family members.

• Parenting Strain: Parents may feel overwhelmed by the responsibility of providing for their children and making decisions related to their well-being. Parents, even the very best of them, may become more irritable, less patient, and less emotionally available to their children.

3. Physical Health

• Chronic Stress and Health Issues: Prolonged financial stress is linked to higher rates of chronic conditions, such as hypertension, heart disease, and digestive issues. Stress can weaken the immune system, making individuals more susceptible to illness.

• Sleep Disturbances: Financial worries often lead to sleep problems. Have you ever laid in bed and stared at the ceiling or into the dark about your finances? Insomnia or poor-quality sleep can worsen mental health and overall well-being, creating a vicious cycle of stress/fatigue/worry.

5. Social Isolation

• Withdrawing from Social Activities: This is an often overlooked or not noticed. Couples or even individuals who are feeling financial stress may begin to withdraw from social activities, either due to the inability to afford them or the emotional exhaustion that comes with the fear and possible guilt of spending money. This social withdrawal can increase feelings of loneliness furthering a vicious cycle of stress, fatigue, and worry.

• Stigma and Shame: Individuals on their own or within a couple that are feeling financial distress may feel ashamed or embarrassed about their situation, especially if they are unable to afford things that others take for granted. This can prevent them from seeking help or reaching out to others for support.

  
  

6. Cognitive and Decision- Making Impacts

• Poor Decision-Making: Financial stress can impair decision- making by narrowing focus to immediate survival need and making it harder to think long-term.. In many situations decisions, especially longer term in nature, would be made differently if the noise of short term worry did not ring their ears. In this state of worry and fear, people may make suboptimal choices- such as taking on high-interest debt or neglecting long-term savings goals- because the immediate pressure takes precedence over future planning.

• Risk of Debt Cycle: Financial stress often leads to reliance on credit, loans, or high-0interest debt to cover day to day expenses. This can create a cycle of debt that is difficult to break out of, leading to further stress and instability.

7. Long-Term Financial Consequences

• Intergenerational Poverty: Financial stress can create a cycle of poverty that is difficult to escape, particularly if parents are unable to provide a stable financial foundation for their children. The next generation may experience the same struggles, perpetuating a pattern of economic hardship.

• Lack of Family Financial Decisions and Literacy: Constant financial strain can prevent parents from learning how to manage money effectively and passing down this skill set to their children. Without a healthy financial discussion between parents and their children the longer term intergenerational impact can be immense. As the saying goes, “ teach you children about money today, or some day they will remind you that you did not”.

How to Cope and Overcome Financial Stress

Well there is no pill for this. There is no one-stop, fix-all, method either. Here are three points all of which are easy to say but hard to do but will surely help improve and slowly reposition your financial stress:

• Talk to Someone: Engage a financial professional to help bring context and structure to the problems at hand. A Money Coach or a Wealth Advisor are great examples of people you should reach out as they have extensive knowledge and experience in this areas. Reach out to a Mental Health Professional as well as they can help you understand and provide tools to help manage your anxiety.

• Be the Change: Simply put- if you continue to do what you have done, you will have what you have. If you want to change something, you must become dedicated to the change you want to have happen. Simple steps lead to bing strides.

• Take Ownership: The ostrich hides its head in the sand, or so they say. This is the worst thing that one can do. Of course, being under stress of any kind can trigger different responses at different times. Taking ownership of the situation will have occurred when the two points above have been done.

Of course, there are more practical steps and strategies such as documenting, taking inventory, sharing dream, writing down your goals, and budgeting but first these first three should take place.

Summary

As we have seen from the Brief Discussion Paper, financial stress is not just an economic issue; it’s multi-faceted problem that can have devastating effects on families’ health, relationships, quality of life, and echo into multi-generations. Unlike the Ostrich, taking control and overcoming financial stress requires many things but hiding or ignoring it is not one of them.

Understand and appreciate that you are not alone! Many people are feeling the weight of financial burdens and have for years before and will in the years to come. Families and individuals experiencing financial strain can benefit from creating or re-opening communication, activating simple budget strategies, and seeking professional guidance to alleviate some of the burdens they face.

If you are feeling the weight of financial stress, please feel welcome to contact our Wealth Advisory Team. We have the experience and knowledge to help you and your family move onto a far better financial place.

Disclaimer and Notice to Reader: This Discussion Paper should not be construed as legal or tax advice but rather only as a general statement and explanation of the topic matter. Professional tax and legal advice should be obtained for the readers own personal situation. For more information on this topic or how it applies to your family, please contact our Wealth Advisory team.

Last Edit Feb 5,2025