Not surprisingly, money remains a major concern for many Canadians. According to the Canadian FP’s annual financial stress index, it was the biggest pressure of Canadians as of last year, up from 40% of the previous year. With everything happening, budgets and retirement plans make no sense. Why is it difficult to make financial planning and investment decisions when you are overwhelmed? Glad you asked.
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Stress and Finance: How to Start Making Intelligent Decisions with Your Money
According to Samantha Sykes, a senior investment advisor to Raymond James, one of the reasons people make a lot of big decisions is that they don’t know where to start. Her clients often deal with inheritance from the mid-30s to early 70s, or they were just starting to earn a good salary while also trying to balance getting married, buying a house and building a family. “They feel overwhelmed by the real money and the bigger decisions of real adults. There are almost too many decisions to make these days. So, a lot of the time, it’s easy to leave it. It makes it easier for customers to make too many large financial decisions at the same time and pause when they walk away.”
Chantel Chapman, CEO of the Financial Literacy Program, is the trauma of money and he agrees it is difficult to find a starting point. Canadians usually don’t know where to start when their money is, but choose to avoid or ignore it.
“Economic avoidance is extremely common,” Chapman said at his home in British Columbia, explaining that the belief in avoidance is because of scarcity that otherwise would be disastrous in the mind. The triggers of this “analytical paralysis” may include inflation and feeling overwhelmed. As a result, in order to cope, the brain tries to survive stress, which can be avoided.
While burying your head on the beach yes A choice, this is not a great choice. “The problem with avoidance is that it’s a way to relieve the current pain,” Chapman said. “This gives us temporary relief, but avoiding it has a negative impact.”
Those negative consequences are tangible. They include ignoring bills and statements, refusing to talk about money with friends, family and consultants, not knowing your credit score, and not mastering your net worth.
Relieve stress and investigate your money narrative
Chapman said starting the financial planning and investment decision-making process means looking at your relationship with money. This means identifying narratives related to the money relationship and why you might avoid it.
Chapman said, ask yourself the following questions to gain insight into your money story.
