“ The truth is many factors such as Shame, Anxiety and Depression can affect your finances, but avoiding problems does not make them go away. DIY or seeking professional advice can help.”
By: Allan R Kirby
Financial problems arise for many reasons such as job loss, low income, high personal debt and financial mismanagement. Some of the more common issues faced by couples with money issues are the lack of money management and spending addiction. Spending addiction for example can lead to high credit card debt, low savings and struggling to make minimum payments to service their debts. Unfortunately when there are financial issues, many people tend to avoid tackling the problem.
“Do financial problems cause divorce? Yes, It's a leading cause of couples breaking up, however seeking professional help and by communicating with each other on the underlying issues can help keep a marriage strong."
Of course most of us know, financial problems are a sensitive topic which many of us do not want to discuss, in fact in a U.S. News survey, it found that 1 in 5 couples either committed financial infidelity or had been a victim of it. It’s a little surprising the numbers are not higher but the survey does highlight there are problems with couples and finances. The good news is that couples of all ages are happier when they talk about money, which is highlighted in a TD Bank’s Second Annual Love Survey. The point is, when people open up and discuss their financial problems, it can start the process of fixing those problems. It will never be easy and it can be a tough discussion but what I have learned over the years is that at some point problems become impossible to keep avoiding.
“Financial infidelity comes in many forms such as: hidden bank and credit card accounts, hiding debt or making secret purchases."
Shame, depression, anxiety and mental health
It’s not uncommon for couples and single people alike to knowingly avoid financial problems until it becomes practically impossible to continue to do so. Many people faced with financial issues do not want to openly discuss the problems, especially with someone they know. There are many reasons for this but one principle factor is Shame. Shame is a very toxic and paralyzing psyche that makes people want to hide and disappear from their problems rather than tackling it. This will lead to avoidance which means the underlying issues that are causing financial problems will not get resolved. Additionally people who feel ashamed with their money issues may also feel they have either failed or risk further failure if they try to tackle the problem.
Depression and Anxiety are other issues that affect people's finances as well. These isues centers around low self esteem, which can manifest itself in many ways. One way for example is spending. Consumers trapped in institutionalized poverty or those living paycheck to paycheck, may feel buying a luxury good can go a long way in increasing self-esteem or providing a sense of belonging.
“How can a family solve financial problems? By seeking help and working together can help families through financial issues. But communication and honesty is key to success."
Regardless if a person feels shame, anxiety, depression or fear, financial problems will not resolve themselves. They will continue to persist until the underlying issues are resolved which may mean big changes. I am not a psychologist however I have learned over the years that sometimes seeking professional financial or mental health advice can be key to becoming successful in finding a way of correcting the problems.
Where to begin
So understanding there is a problem and knowing it cannot be avoided, what is the next step? It begins by figuring out how you should approach the problem, do I try and figure it out myself or seek professional advice?
1. Do it yourself means learning Financial Literacy
If you plan to try and tackle the problems yourself or as a couple, you need to understand this takes time and patience. DIY is not a quick solution and the learning curve is steep depending how much you want to tackle yourself. It took me several years to build up my skills and knowledge that allowed me to make effective decisions on how to manage my money over the long term. Generally speaking I had to learn::
1. Budgeting.
2. How to manage and pay off debt.
3. How to save money.
4. How to invest my money and build wealth.
5. Planning for retirement and dealing with taxes.
Budgeting, paying off debt, saving money and planning for retirement are all part of managing money. As I had just mentioned learning how to develop and implement a plan will take time. Finding websites, videos and reading books all helped me develop the skills to handle my money but it was really confusing at first and sometimes I would find conflicting advice. I made a lot of mistakes over the years but in the end I was able to find a way to manage my money. In addition to money management, you can look at DIY investing. However all the responsibility lands on you and if you do not pick your investments well, you could end up losing money. Secondly DIY requires that you continually do research on your investments as well rebalancing when required. This can mean hours of work and added tax complexity, so it’s something to avoid if you’re not committed.
2. Professional Help - Money Coach / Financial advisor
It’s important to know that personal finance can be difficult so I will always advocate that readers seek out a money coach or visit a financial institution to talk to a financial advisor if you are not sure where to begin. This is exspecially important for married couples as well because getting your finances in order can help your relationship over the long term.
There are many types of professional but we tend to like Money Coaches because they provide a more comprehensive relationship and help you make fundamental changes to your behaviour such as.
1. Reviewing and helping you improve your spending behaviour.
2. Developing short and long term financial goals.
3. Tracking your achievements and identifying weaknesses.
4. Help you make modifications to your behaviours and goals on an on-going basis.
Money coaches will take the time to work with you. They will help you with financial literacy as well as looking at how you can change your behaviours in order to improve your financial health. Financial advisors on the other hand will provide you with a set of products and services that are best tailored to meet your current situation. They will not however guide you on modifying your behaviors nor will they continually follow up to ensure you are progressing.
“How to overcome financial issues in a marriage? Working together and seeking professional help to get your finances and relationship back on track."
Both Money Coaches and Financial Advisors have their strengths and weaknesses but regardless of who you pick, working with a professional will start the process of getting you back to financial health.
“Find what works for you so you can get out of financial trouble."
One of the biggest issues I have found over the years is the fact that managing money, a critical component of our lives is never taught in schools. This is too bad because many peoples end up going into adulthood lacking important financial literacy skills. This of course leads to financial problems that at some point need to be dealt with. But when we do get the courage to face the issues it can be done through either DIY or seeking out professional help with a money coach or financial advisor. Either way, the most important aspect of resolving a money issue is to communicate your problems and not hide them. Problems will never get solved with avoidance, You need to face the problems head on to get yourself back to financial health.
This is a MySmallBank.com blog written by Allan Kirby, who writes and produces Personal Finance and Money Management articles and videos along with My Success Magazine.
Disclosure: mysmallbank.com and the author will not endorse or receive any compensation for any single product or service, if mentioned in our article. The article is our opinion only and is written to help readers learn more about personal finance and budgeting.