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Debt Stress

Financial Anxiety – Dealing With Debt Stress Syndrome

Are you losing sleep because of debt stress or other financial worries? If so, know you’re not alone. Financial anxiety prevents 48% of Canadians from sleeping well. The top three financial concerns keeping people up at night are debt (57%), planning for retirement (22%), and not having enough money in savings (55%).

What is Debt Stress Syndrome?

Financial fears are often the driver of sleeplessness and anxiety. Many Canadians state that one of their biggest fears is the fear of debt. Borrowing is sometimes necessary to help you accomplish goals like buying a house. However, unmanageable debt can cause anxiety because:

  • You’re carrying too much debt leaving you unable to save for the future.
  • You are wondering if you will be able to repay your debt.
  • You have a fear of Bankruptcy.

Debt stress syndrome results from financial worries negatively impacting your physical and mental health. People suffering from debt stress syndrome may find it affects their emotional well-being and relationships.

Unfortunately, debt stress syndrome can affect your employment too. If you don’t feel well, are tired, unable to focus, or have other related health issues, your performance at work could suffer. Poor job performance can lead to being disciplined, demoted, or fired.

How debt stress can affect your body

Stress can take a toll on your body, putting you at risk for many health issues such as:

  • Heart disease
  • High blood pressure
  • Insomnia
  • Headaches

Canadians experiencing financial stress are four times more likely to have difficulty sleeping and suffer from headaches. Your mental health can also suffer when you don’t feel or sleep well.

Debt stress and mental health

Money plays an essential role in our lives. It affects where we live, what we eat, and our lifestyle. It can affect our social circle too.

The 2022 financial stress survey found that the biggest worry is money. Inflation, job instability, and increasing interest rates have made life more expensive. More Canadians worry about their financial situation (38%) than any other issue, including health (21%). Moreover, 39% of Canadians feel less optimistic about their financial situation than a year ago.

Suppose you have financial worries or aren’t hopeful about your finances. In that case, you might be experiencing depression, anxiety, or other mental health issues.

Emotional effects of debt

The emotional effects of debt are sometimes overlooked. However, when your physical or mental health is affected by financial anxiety, your emotions likely will be too. Poor mental or physical health can leave you exhausted, anxious, emotionally distant, or short-tempered. If you have trouble managing your emotions, your relationships could also suffer.

Relationship stress

Financial problems are one of the leading causes of divorce in Canada. Disagreements on how to spend or save money, debt, and insufficient income can cause relationship stress. Being unable to resolve these problems can lead to people parting ways.

Marriage is not the only relationship that can feel the harmful effects of financial anxiety. If you’re financially stressed, you’ll find it challenging to provide the things you want for your children. You might also skip going out with your friends or avoid family members, making you feel socially isolated. You could even resent those who depend on you financially, further straining your relationships.

How to Deal With Debt

The good news is there are steps you can take if you have debt stress. The first step is learning about money to find out what’s causing your financial anxiety. After that, you can create a budget and take advantage of the many resources to help you with your journey.

What’s causing your financial stress?

Your story will be different from everyone else’s, but there are some common issues when it comes to money concerns. One study found that the main things people worry about are:

  • Having an expense they did not anticipate (44%)
  • Not having enough money to retire comfortably or at all (38%)
  • Being unemployed (22%)
  • Never being able to own a home (17%)

These are genuine concerns, each of which can significantly impact your life and your future.

Learn about money

Although money is a critical part of our lives, it’s something many of us didn’t learn about when we were young. As a result, some of our financial anxiety may simply be a result of a lack of knowledge. Fortunately, there are a lot of resources that can help cultivate better money management skills.

The Financial Consumer Agency of Canada offers tools, articles, and information on becoming more financially literate. They’ve also dedicated the month of November to financial literacy, where they provide additional resources to help Canadians deal with their finances.

Create a budget

Creating a budget will help you see how much money you have come in, your expenses, and what you’re spending. You’ll get an accurate picture of your finances. Knowing where you stand financially will help you plan how to address your money worries.

Your budget will let you know if you have extra money being spent on non-necessities that could be put elsewhere. By reducing non-essential spending, you can put the surplus into a savings account for an unexpected expense or apply it to your debts to pay them off more quickly.

You can use extra savings to build an emergency fund to cover your expenses if you are unemployed. Additionally, the money can go towards a downpayment for a house.

The value of a budget

Your budget can highlight problem areas for you. It may show you need more income to meet expenses or carry too much debt. While these realities may not be to your liking, your budget is a tool to help you achieve your goals. Once you know the issues you need to address, you can make a plan.

Knowing the cause of your financial worries will help give you the needed direction to address them. If the problem is that your expenses exceed your income, some steps you can take are:

  • Reducing your expenses
  • Finding a job that pays more
  • Starting a side hustle
  • Taking on a part-time job

To reduce your debt, consider the following:

  • Downsizing to reduce your living costs
  • Selling some assets to put towards your debt
  • Switching your debts to lower-rate products, such as transferring a credit card balance to a line of credit
  • Consolidating your debt so you only have one payment

Resources That can Help

There are resources to help you get control of your finances. Tools are available to help you create a budget to see where you stand. You can use a budgeting app you download to track your expenses automatically. Tools and calculators help with financial projections, including savings goals.

Your budget will also let you know if your expenses are more than your income can reasonably cover. If you find yourself in a position where you cannot manage your debt, help is available. Our Licensed Insolvency Trustees (LIT) will help you with credit counselling, Consumer Proposals, and filing for Bankruptcy.

We don’t judge you because we understand there are many reasons why you may be struggling with debt. But, unfortunately, bad debt sometimes happens to good people. We aim to help you get a fresh start by getting out from under your debt load.

Don’t hesitate to contact John Adamson and his Associates at 519-310-JOHN (5646) for a free consultation. Adamson and Associates can provide debt relief to help you regain your life.

John Adamson, Licensed Insolvency Trustee Ontario

John Adamson, CPA, CMA

John is a Licensed Insolvency Trustee (1994), a Chartered Insolvency and Restructuring Professional (CIRP – 1994), and a Chartered Professional Accountant with a Certified Management Accounting designation (CPA, CMA – 1992). His experience includes more than 25 years of helping individuals, small businesses, their owners and even lenders, find solutions to their debt problems.

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