We carry powerful stories about what shapes us into who we are, what gives us strength and resilience, and what gets us up every morning and drives us to do what we do. My story began early in childhood, but in this blog, I will share my most recent health ordeal and how financial planning helped me manage it. When I was diagnosed with a condition this year, it felt like my world was tumbling down. Yet, through the midst of uncertainty, my carefully devised financial plan became my lifeline, providing clarity and stability in one of the most turbulent times of my life.
Recognizing the Emotional Impact of Financial Stress
Facing unknowns can suddenly make us feel unstable and cause us to spiral into worry and panic. From my health experience, two major lessons have emerged: while we are in charge of how we act and respond, we must accept that some things are beyond our control and prepare ourselves for any result. By making plans, you can manage your actions and reactions more effectively, ease stress, offer a sense of security, and prepare for the unpredictable.
On the day of my 36th birthday in June, I hit a breaking point. I was fed up with enduring constant pain (and the anxiety and mental distress that came with it) and tired of being overlooked by the healthcare system. On June 5th, I drove from Powell River to VGH, desperate for relief. At the hospital, the emergency room doctor recommended I try some anti-acid medication and then return in a month if there was no improvement. Unwilling to accept this and desperate for answers to my long-standing chronic pain on my body’s right side, I insisted on staying until I got some clarity. To calm my concerns, the ER doctor ordered a CT scan. Surprisingly, the scan revealed a 10cm by 10cm tumour/cystic mass in my chest, affecting vital organs like the liver, pancreas, small intestines, lungs, heart, and nerves.
My mind was overrun with fear – what if it was cancerous? I’m a parent to three kids; what am I going to do? When I was told that testing could take up to 3 months, I was overwhelmed with emotion and pleaded with the doctor, pointing out that, as a parent, I couldn’t wait that long. I was reassured in the ER that whatever it was, it seemed to grow slowly, suggesting we had time for thorough testing and treatment. After eight days, I returned home, physically and mentally drained.
Previously, I might have sought comfort in retail therapy, but this time, I turned to what I had learned from dealing with trauma and managing finances. I was ready for this; I had the tools and knew it was time to reflect, reach out for support, and put into practice the financial and emotional coping mechanisms I’ve gathered over the years. This approach was instrumental in calming my financial worries and helping me think clearly again.
The Role of Behavioral Economics in Financial Planning
Investopedia explains behavioural economics as how psychology impacts the choices we make. It mixes psychology with economics to figure out why, even when we know better, people often choose options that don’t make sense.
When we face uncertain situations, if we are ill-prepared or haven’t thought things through, our ability to think logically can take a backseat. We start relying on simple mental shortcuts to make big decisions. These shortcuts are essential; imagine having to deeply think about everyday tasks like tidying up, driving, or running errands. We’d be worn out. Yet, when it comes to handling our finances, clear and careful thinking is a must. When we’re feeling stressed, anxious, exhausted, or overwhelmed, our capability to think critically is severely limited. Humans are incredibly adaptable, but we’re not machines, and everyone has their own limits when it comes to stress and risk. In financial planning, it is helpful to recognize your own limits and triggers.
For me, the first step was to let myself cry and accept that feeling sorry for myself (temporarily) is alright. Scientific studies show that crying helps release stress. The test results revealed that my tumour was packed with benign inflammatory cells. Stress leads to inflammation, which, if pent up, can result in both mental and physical health issues.
A recent study by FP Canada finds that nearly half of Canadians lose sleep over financial worries. I came across a few enlightening books on stress, trauma, and their effects on us: Bessel van der Kolk’s “The Body Keeps the Score”, and Gabor Mate’s “The Myth of Normal”. I then noticed that in my own financial planning practice, there seemed to be a strong correlation between my clients’ general state of well-being and money worries. This led me to the work of Brad and Ted Klontz and their insightful book “Mind Over Money”, where they delve into the connection between money disorders and unresolved trauma.
I finally could draw a link between my adverse childhood experiences and behavioural biases, negative money attitudes, and health problems. Discovering these books gave me answers and a plan to rewire my brain permanently. The powerful work I did around my family’s finances and the subsequent positive results motivated me to apply to the Financial Therapy program at Kansas State University. I became determined to help people in a more meaningful and lasting way.
While undergoing numerous tests to identify the origin of my medical condition, I leaned heavily on what I had learned about mental and financial well-being. I reminded myself not to fall back on old harmful spending habits. I have a plan. I vowed to avoid stress-induced shopping sprees or charging an unaffordable vacation to our credit card.
I sent an email to my insurance agent: “Chris, is the best doctor consultation rider included in my critical illness plan? It’s tough getting a clear diagnosis for my cyst. I could use some assistance.” “Yes, Lena,” he responded. That reassurance was a relief; I felt I was in good care.
Next, I reviewed our family’s finances to see how far my critical illness insurance of $100,000 could stretch considering our other resources. I felt reassured knowing we were covered. I had also made sure to have a Will, an Enduring Power of Attorney, and a Representation Agreement set up. Going into the surgery, the outcome was uncertain. It was nerve-wracking not knowing whether I’d have a minor procedure on my liver or a major operation potentially involving the removal of an organ and additional procedures. That was beyond my control. However, I took charge of what I could by preparing as best I could.
In the weeks leading up to my surgery, I concentrated on staying present, taking care of myself, and cherishing time with my family. I took 30-minute walks in the woods to ease stress and anxiety while getting ready for surgery. I avoided making any big, spur-of-the-moment buys or other unwise choices.
Building Wealth Through a Personalized Financial Strategy
Each of us carries a unique tale that shapes our identities and behaviours, especially regarding how we think and react under pressure. Understanding our stories can make us more resilient against common errors when we’re stressed. Your financial advisor plays a crucial role in navigating wealth creation through potential risks, acting as your primary contact for financial downturns and personal disasters. Consequently, it’s essential that your financial strategy is as tailored and individualized as you are. A variety of sophisticated financial planning tools exist, including Conquest, Snap Projections, and Planworth. Nonetheless, guiding each of these tools requires an experienced hand.
It’s a common misconception that earning a six-figure salary automatically translates to financial stability. Many high earners face financial challenges similar to those earning less, largely due to issues with financial management. I’ve experienced this firsthand. Despite earning a six-figure income since the age of 30 and making wise investment decisions, I struggled with a money avoidance disorder.
Growing up in a challenging socioeconomic environment, I internalized beliefs that money is inherently bad and that wealthy individuals become rich by exploiting the poor. These beliefs formed my money scripts, profoundly influencing my financial behaviours. As a result, I justified excessive spending on my children to give them a better childhood than mine, irresponsibly donated to charities and people in need, and volunteered my services for free to numerous clients.
My choice of profession further reinforced my negative money scripts. In my career, I frequently encountered companies and advisors that profited by selling expensive and unnecessary investments or insurance policies to clients, cementing my belief that money and morality were incompatible.
This financial behaviour, rooted in deep-seated beliefs about money, led to ongoing financial instability despite a substantial income. It wasn’t until I began to recognize and address these underlying issues that I could start to achieve real financial stability and peace of mind.
A report by the National Endowment for Financial Education highlights a startling fact: nearly 70% of lottery winners face bankruptcy within five years of their win. Surprisingly, managing substantial wealth can introduce as much stress as the scarcity of funds. Large windfalls can lead individuals to fall prey to their inherent biases, quickly depleting their fortunes as swiftly as they were acquired. A robust financial plan that integrates an understanding of client psychology is essential for retaining and growing wealth.
The Therapeutic Benefits of Financial Planning
Taking steps to plan your finances can make you feel better in many ways. For one, it can take away a lot of worry about money because it gives you a detailed guide on how to manage your funds and what to do during uncertainties. It also makes you feel in charge of your money situation, which can make you more confident and calm. Additionally, it sets you up to reach your money goals and dreams, filling you with hope and a drive to keep going. These benefits to your mental health really help encourage you to keep up with your financial planning, starting a beneficial cycle of feeling good mentally and doing well financially.
For me, creating a plan for my money and being mindful of my spending habits and past mistakes (especially during tough times) laid the groundwork for getting through my latest health issue. It helped me concentrate on things within my control and let go of things outside of it. It gave me a sense of clarity amidst chaos.
After my operation, going to the sea was a revelation. For maybe the first time, I took a deep breath that filled my lungs and belly. I could take in the scent of the ocean, and the constant anxiety I felt before the surgery faded away. I realized I had overlooked the simple pleasures of life. The sheer delight of being able to breathe deeply again was astonishing. I felt so happy and thankful. I was overflowing with a newfound happiness and a deeper appreciation for life.
Overcoming Financial Setbacks and Building Resilience
Overcoming difficult situations can lead to beneficial changes in the way our brain functions. This can result in better memory, increased emotional toughness, mental adaptability, innovative thinking, and enhanced problem-solving abilities. These improvements can positively impact one’s ability to make sound financial decisions.
Growing up, I faced hardships, made numerous errors, and had to confront and heal from deep emotional scars while revising my financial beliefs. I also partnered with someone who brought his own set of challenges and financial viewpoints. Together, we embarked on a journey to understand and value each other’s perspectives. We are constantly and diligently working to improve our relationship and general well-being and instill newfound values in our three beautiful children.
Reflecting on the toughest periods of my life, I’m now thankful for those moments of growth. There are times when I feel invincible and vulnerable at the same time. I have learnt to look back at each obstacle, extract meaningful lessons, and incorporate those insights into every facet of my life (including my professional engagements with clients). I’ve become adept at observing and absorbing the narratives of others, acknowledging their distinct hurdles. The learning never stops. Life becomes an incredible educator if you’re open to the lessons it offers.
The Importance of Ongoing Financial Education and Support
Just like talking to a counsellor can help us handle life’s ups and downs, learning more about money and getting regular help with it is super important if you want to effectively manage your wealth. It’s kind of like when you chat about problems and start figuring out the answers as you go. Having a money expert give you advice can show you options you didn’t think of before.
Talking it out helps us get better at making plans and changing them when life throws us a curveball. The goal isn’t only to become financially literate but to feel confident in dealing with money matters throughout life’s rollercoaster. This kind of support is not just about the numbers; it really understands the personal side of dealing with money, making sure we’re okay with our feelings and helping us find a good balance in how we manage our money. In the end, it’s all about building a learning relationship that helps your financial health get better and makes sure money issues don’t mess with your overall well-being.