MARCH 28, 2023    
By Kristen Mayne

Read time: 3 minutes

Are you worried about your finances? You’re not alone. There are three financial concerns that are weighing on the minds of many Canadians:

  1. The cost of living 
  2. Having enough money saved for the future and/or retirement
  3. Paying off debt

We spoke to a psychologist and a Sun Life advisor to find out: 

  • how financial stress can affect us and 
  • what to do about it.

How financial stress can affect mental health

There’s no doubt, says psychologist Dr. Eliana Cohen, financial stress can affect our mental health. “Most people stress about money from time to time. But it can become problematic if it disrupts your everyday life. You might find you can’t focus or enjoy the things you normally enjoy.”

Dr. Cohen says if your financial stress is severe, it can feel overwhelming. “When you’re financially strapped, it can affect many things. This includes your ability to afford a home, food, clothing and so on. This can cause you to go into a state of fight or flight. Or end up in a freeze state, which is like being a deer in the headlights. This can lead to someone withdrawing from social activities. It can also lead to being easy to anger and/or feelings of irritability.”

Feeling stressed about money can affect relationships, the ability to parent, decision-making and your job, says Dr. Cohen. “It can also affect your energy levels, sleep and self-esteem and can lead to depression and anxiety.”  

How to manage financial stress

When under financial stress, it can be hard to think your way out of the situation, says Dr. Cohen. “When you’re in a high stress state, all of your cognitive resources are impaired. This is because your nervous system is going into overdrive. The first thing you can do is work with your nervous system to settle the fight or flight.”

To help calm your system, Dr. Cohen suggests:

“Practicing self-compassion is a detox from all the negative thoughts about yourself,” says Dr. Cohen. “The first thing that you need to address is shame and helplessness. The point of entry is self-compassion.”

Dr. Cohen says self-compassion can be an important step to get emotionally ready to ask for help and/or seek advice from an advisor.

How to reduce financial stress

Financial security advisor Yoldas Ozturk at Sun Life says it sounds simplistic, but it all starts with a plan. “It’s the key element. Even if you’re in debt, an advisor can support you.”

Ozturk says the first step when he meets with a Client is to look at how much money is coming in and going out. Next, he says it’s important to find out a Client’s financial fears. “It may be around retirement or daily expenses. Or they may worry whether their family will be okay if something happens to them.”

From there, Ozturk says advisors work with Clients to build a budget to help them reach their goals. “A proper budget is crucial to a plan that is well built. If expenses go up now, you may have to tighten up your cash flow. But that means down the line when you’re ready for retirement, you’re in a good position.”

Another key step, Ozturk says, is to educate Clients about their investment options. “A lot of people aren’t aware of the different financial options. An advisor can bring in some important perspective based on the Client’s unique goals and risk tolerance.”

With retirement weighing on many people’s minds, Ozturk has some sound advice. “Where you are in year one isn’t where you’re going to be in year five or year 10. Don’t look at what you have today. Rather look at the potential of what you’ll have down the line and how you’ll reach it. This may help reduce feelings of anxiety while you are working toward your goals.”

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This article is meant to provide general information only. It’s not professional medical advice. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.