The key to financial success is to create a financial plan and keep up with it in the long run. Sometimes it's easier to say than to do it.
How Mental Health Affects Financial Planning
Stress from three areas of your life may weaken your financial plan
Financial / economic events
- Market ups / downs, bad economic news, recession, employment, interest rate hikes, etc.
- Death of spouse, divorce, marital status change, injury, career change, etc.
Physical / mental illness
- There is mental health (ie state of well-being, achievement of potential, dealing with normal stress and mental illness), dementia, mood and anxiety, addictive disorders and of course psychotic disorders,
Stress from these three areas can affect your mental health and affect your decision making.
When faced with stress, we usually fight, run, or freeze.
- FIGHT: We can become aggressive, emotionally responsive and impulsive, short-term decisions
- FLIGHT: We can exclude, reject or avoid making important decisions.
- FREEZE: We may be stuck or paralyzed to a point where we can not even accept the decision
All these reactions can hinder the success of your financial plan.
It is as important as a financial planner to recognize some of the common health problems facing Canadians today. They include:
- Reduced financial ability
- Misuse of substance
- Gambling Problem
Any of these questions could be disastrous for your financial well-being.
The duty of financial advisors
The role of the balance for counselors between privacy and confidentiality is fundamental. But that does not mean that you do not have a fiduciary duty to sometimes protect your client from yourself. Contact industry experts, look for expert / peer support and continuing education to help detect warning signs and legal boundaries.
Facing the Financial Crisis
The best time to address the financial crisis is five years before this happens. Now is the time to talk about potential problems that might be in front of us and for clients and counselors and document how a potentially mental health problem can arise if it appears.