Stress and Money Management

Money management does not cause stress. Stress is caused by lack of money management which itself is caused in the main by the materialistic society in which we live. On all sides we are badgered to buy this product or that product. Each and every product produces is "new and improved" leaving the impression that what we are using is old and not really that good.

This constant bombardment induces people to buy whether they can or cannot afford to spend the money. If they cannot afford to spend the money they may feel that they have failed in life and, rather than this, people will spend and throw their money-management plans away. They will use plastic, conveniently forgetting that the bill, although delayed, will still have to be paid. Loans are there. Financial institutions "love to lend money for any worthwhile purpose"-meaning for whatever you want.

While you are buying there is no stress. It's when you have to pay that bill the stress begins to make itself felt.

Effect on Families

Let us look at an average family who has fallen into the lack of money-management trap and follow their steps through to their logical conclusions, taking note of the stress placed upon the family unit. Firstly, there is the euphoria of buying; then displaying or using the product. Too soon, familiarity sets in and the bright, shiny new product becomes part of the scenery. Next, the bill arrives. Can it be paid off now? No. So it becomes another "easy payment". Unfortunately all these easy payments lumped together become one extremely difficult payment causing the first stress factor of "can we afford to make all these payments?" If not, then selected payments are made and in this selection process the correct decisions are not necessarily made. Whoever shouts the loudest gets first crack at our family's cash. Some payments are missed, causing yet more stress as they are worried about. Most lenders will make allowances for a missed monthly payment as long as the account is brought up-to-date the next month. However, if our family cannot make one payment, how on earth can they make two? More stress.

By now the recriminations have started over who bought the product. The "you wanted it" and the "you said that we could afford it" dispute. And so it goes on. The family is racked with tensions; a day without mail is a good day. Every cent is a prisoner. The children are shouted at whenever they leave a light on or leave their food uneaten. School trips are missed because the family cannot afford the money. Because of the stress being placed upon the family unit, sooner or later the unit will break apart or be severely damaged. Violence can occur as patience is stretched to the limits.
The only way to avoid the stress caused by lack of financial plan is to sit down and devise a plan that will work for you.

The foregoing is not far-fetched; it has happened countless times in the past and will occur countless times in the future. With a recession looming in Canada the problem is made worse. High interest rates mean higher monthly payments as the debt interest must be paid before any principal is touched. Higher payments, of course, mean even more stress to our beleaguered family caught in the web.

Another form of stress can be caused by one family member taking care of all family finances. He or she may well do an excellent job, but what if there are problems? We have one family member beset with financial worries and the other family members concerned because, although they do not know the cause of the problem, they know that something is wrong. This of course causes stress all round. (And, of course, in the case of marriage breakdown, or the death of the spouse who is the money-manager, there is severe stress for the partner who is left unskilled in the area of financial management).

Developing a Financial Plan

The only way to avoid the stress caused by lack of financial plan is to sit down and devise a plan that will work for you. It doesn't have to be complicated nor does it have to be so strict that it leaves no scope for leisure or discretionary spending. This is one of the largest reasons for the failure of a financial plan. People will not give themselves sufficient room to spend for enjoyment. They either obsessively watch every penny or, eventually, they give up the whole system and spend compulsively as a relief from the strictures of a too rigid financial plan.

Philosophers have said that money was invented to distract people's thoughts from the impermanence of life. (Personally, we think that it was Golf, but we are no philosophers!) We are on this earth for a very short term and must enjoy it while we can.

Money Management is an easy skill to learn and by using it, a great deal of stress can be lifted from our shoulders.

Charles Dickens put it better than anyone else when he had Mr. Micawber say, in Nicholas Nicholby: "Annual income one pound, annual expenditure nineteen shillings and sixpence; result happiness. Annual income one pound, annual expenditure one pound and sixpence; result misery".

     Used with permission, Institute of Family Living, 120 Eglington Ave. East, Suite 700, Toronto, Ontario M4P 1E2