The key to financial success is to create a financial plan and stick to it in the long run. Sometimes it's easier than to do it.
How does mental health affect financial planning
Stress from three areas of your life can derail your financial plan in your heart
Financial / economic events
- Market ups and downs, poor economic news, recession, employment, rising interest rates,
- Death of a spouse, divorce, marital status, injury, career change, etc.
Physical / mental illness
- There is mental health (ie welfare state, achievement of potential, managing normal stress and mental illness), dementia, mood and anxiety, additive disorders and, of course, psychotic disorders,
Stress from these three areas can affect your mental health and influence your financial decision-making.
When we face stress, we tend to fight, fly or freeze.
- FIGHT: We can be aggressive, react emotionally and make impulsive short-term decisions
- FLIGHT: We can separate, deny or avoid decision-making.
- FREEZE: We could get stuck or paralyzed until we can not have a decision
All these reactions can disrupt the success of your financial plan.
It is so important for a financial planner to recognize some of the common health problems facing Canadians today. They include:
- Decreased financial capacity
- Abuse of addictive substances
- Gambling issues
Any of these questions could be catastrophic for your financial well-being.
Obligation of financial advisers
A balancing act for privacy and confidentiality counselors is essential. But that does not mean you do not have a fiduciary duty to protect your client sometimes apart. Talk to industry specialists, look at company support / peer training and further training to help detect warning signs and legal boundaries.
Solving the financial crisis
The best time to tackle the financial crisis is five years before it happens. Now is the time to talk about potential problems that could be a precursor for both clients and counselors, and document how a potential mental health problem might be.