Worries over money can cause significant emotional stress and is one of the leading causes of problems in relationships. Financial anxiety can affect anyone, regardless of income level. It can cause serious problems at home, at work and may even affect your health. As Dr. Oz often notes, prolonged stress can cause all sorts of ailments such as headaches or upset stomach and can affect your blood pressure, heart rate, sleep and blood sugar levels. Over time, these issues can lead to hypertension, heart attack, diabetes, ulcers, inflammation and mental health disorders.
Many factors in life can make you anxious about your financial situation. Some situations we bring on ourselves, like over-spending or living outside our means and accumulating unhealthy debt. Failing to sufficiently save and invest for the future can create excess fear as we approach funding our children’s education, retirement or other major milestones. But sometimes it’s just everyday life that keeps us up at night worrying and wondering how we’re going to make it financially. When this kind of financial stress hits you, it is time to check your vital signs and see a financial professional.
Here are just a few of the issues and life-changing events that can affect your financial well-being if you are unprepared.
Marital Bliss You are compatible in so many ways, but many couples find they have different ideas about spending, saving and even risk-taking. Money problems are one of the leading causes of discord in relationships. You’ll need to decide on joint or separate bank accounts. You’ll need to decide how you will share or split financial responsibilities for both your income and debt. You’ll also need to discuss priorities like saving for a home, a new car or even a vacation. Keeping lines of communication open can help you through these issues.
The American Dream Buying a home used to be the American dream. Now, to some, it has become a nightmare. The housing bust and home lending debacle of the recent “great recession” have put owning a home out of reach for many, plunged hundreds of thousands of mortgages underwater and forced many American families into foreclosure.
Bundles of Joy Children add a wonderful dimension to our lives, yet come with financial strings attached. Besides the obvious responsibilities and costs of nurturing, feeding, housing and clothing them, early on you’ll need to start thinking about their future in financial terms. There are childcare considerations and trips to the pediatrician and orthodontist, their first car and the insurance that goes with it, their recreation and their education. All of these elements carry big dollar signs.
College Savings If you are planning to send junior off to a 4-year college, you can expect to pay in tuition, room and board, books and miscellaneous fees anywhere from $80,000 - $100,000 at a state university or as much as $200,000 to $400,000 at a private, non-profit university for an undergraduate degree. That’s if they complete their degree program within 4 years, which these days only about 36% of students do so, according to the College Board. Of course many students qualify for some type of student aid, which could shave thousands of dollars off the bill. But the point remains that college is a major expense that can’t be ignored if you want your children to go to college.
All Grown Up You raised them, you educated them and now, hopefully, they’re off on their own. But sometimes your children still need a little help from the Bank of Mom and Dad. Whether they land back on your doorstep after college or a job loss, or look to you to help fund their nuptials, you’ll need a plan with an emergency fund attached to help them get back on their feet and on their way to living happily ever after.
Retirement Planning People are living as much as a decade or longer than their parents did, thanks to advances in medical science, exercise and better nutrition. But along with longevity comes the need to earn and save more or run the risk of outliving your retirement savings. In order to have sufficient means to live comfortably throughout what could possibly be several decades of retirement, you will need to start early, be well organized and equally well disciplined.
Aging Parents Just when you hit your prime, you may find that your parents are beginning to decline. Many of us will see our parents live well into their 80s, 90s and beyond. As they age, they may face physical and/or mental health issues that require your intervention and support. From the extra TLC they’ll need to the tasks of evaluating assisted living, nursing care or retirement homes, the emotional and financial burden involved with caring for your parents may fall on your shoulders.
Catastrophic Illness It seems to be happening to more and more families. The unthinkable occurs – a close member of your family is diagnosed with a life-threatening illness or injury. With skyrocketing health care costs, even the best insurance coverage may not cover everything. On top of the emotional strains that come with a serious illness, worries about how you or other family members will pay for the mounting medical bills, prescription drug costs, and extended care and therapy expenses, and possible loss of income can be devastating.
Life Happens When you get sick you call a doctor. When your financial health is in jeopardy, you may need to call in a professional like a certified financial planner or a registered investment advisor who can help you examine all aspects of your life challenges and create a “wellness” plan to get back on track to a healthy financial lifestyle. Over the coming months, I’ll tackle each of these life milestones in depth and offer suggestions on steps you can take to improve your financial well-being.