The economic impact of Covid may worsen personal and business financial problems, caused by unemployment, pay cuts, business closure and illness. The aftermath of Covid effects disposal income, savings, retirement pensions, investment and debt. This can result in people worrying excessively over a period of time about their financial security. People who get into debt or lose their business may find it traumatic and overwhelming to deal with.
The uncertainty and lack of security may drive people into a state of shock where they are unable to react or cope. Financial stress is just like any other stress in our life, it can lead to depression, anxiety and illness. Financial loss effects mental health and it is important to make the connection between financial money problems and the traumatic affect it has on your health and wellbeing so that you can seek out ways and learn to cope. Financial problems arise for many reasons; some can be outside of our control, making it even more stressful. Not having sufficient money can limit ones options in life and a person may fear not being able to live as comfortably as before.
Managing money is difficult for everybody, especially when money is scarce. Be aware that it affects everybody, not just you as an individual but also very large businesses who have similar problems on a greater scale.
As an accountant, I have noticed that people can have a deep sense of shame and guilt when they do not succeed financially. This may result in a person trying to hide financial problems or ignoring the matter completely. Assisting somebody to take action and starting to deal with this problem means one can deal with the problem, or grow the business and move on again. Now is a good time to re-assess how you work and live and how you identify with money problems that you may have. Taking control over your finances will redirect your energies towards building your financial future.
5 approaches to begin dealing with financial hardship:
- Step Back – Create space between you and the problem to give yourself time to really think through your options in a relaxed calm environment, you will be surprised what comes to mind when you are relaxed and rested
- Goal Setting & Values – setting good goals can help us identify a plan for how you hope to get from A to B. Identify what money represents to you and what value you place on it in your life. Set goals that are SMART: Specific, Measurable, Achievable, Relevant, and Timely. Ask yourself if earning money is just a means to an end, what skills or hobbies make you happy that you can use to earn, can you make a good living in your existing career or do you need to upskill.
- Reality Check – Be honest, talk about it and understand your financial position; do you overspend and live month to month, are you drowning in debt and over extended or do you save excessively hoarding money which needs to be invested to grow. You can choose to build upon your good habits and minimise the ones that aren’t serving you. Remember, positive action that you start today will compound over time into amazing results.
- Financial Self Care – Develop financial skills necessary to improve your decision making ability and to avoid more stressful financial situations. Nobody is good at everything, so if you are not good with finances, seek out support. Take responsibility for what you can control and do your best to let the rest go. It is wasted energy. Have somebody to talk about money with, your family, friend or advisor.
- Engage for the long haul – Financial management is a process and your plans should be reviewed once a year to ensure that it still makes sense for you and your lifestyle. Take daily exercise, eating healthy, write down the issues, engage in relaxation techniques and set both personal and financial goals. Find an advisor or tools that help support your financial plans.
Financial situations change over a person’s life and it is worth reviewing your financial situation regularly to keep things on track. Financial plans are best made with clear objectives in mind. If you are still having issues dealing with financial matters, you can engage a professional accountant or business advisor to arrive at financial solutions to keep your financial situation in check.
If you would like more information, please email me at: Info@MKConsultancy.ie