Patients Experiencing Financial Stress?
This Treatment can Help
Brian Pritchard
The Medical Post
September 2009
The patient is complaining of anxiety and headaches and is having trouble sleeping. Her blood pressure is elevated. She says she’s arguing frequently with her husband and kids and mentions that she was recently laid off and also fears that her husband’s job is tenuous.
Like this patient, many Canadians are struggling with symptoms of stress as they deal with the uncertainties of an economic downturn and job concerns. Stress – whether caused by financial or other worries – is linked to health problems ranging from muscle tension to headaches, digestive problems, depression, even heart attacks.* While doctors can address the physical symptoms of patients experiencing financial stress, it’s only by resolving the underlying causes of the symptoms that a patient can achieve long-term well-being.
The following five-step protocol addresses these fundamental issues. This approach can help patients pinpoint problems, take control of their financial situation, strengthen family relationships and enhance mental and physical health.
- Build a team. When a patient is part of a multi-person household, all members, including children, should work together to address the impact of reduced income on the household’s finances and to create an action plan. Discussing goals, priorities and progress every month supports successful results.
- Focus on the future. The team should determine whether this is a short-term setback or potentially a longer term challenge. If the problem is temporary, the group can consider ways to manage through it, such as taking on part-time work, selling a car, boat or other asset, or asking other family members for a loan.
- Assess the situation. It’s crucial to determine whether income can support the household’s requirements. The team should calculate total current monthly net (take-home) income, or future income in the case of a prospective job loss. Then everyone should track expenses for one month, keeping receipts and writing down everything they spend. At the end of the month, adding expenses and subtracting them from monthly income will show whether income can cover expenses.
- Reduce spending. The team should review each expense and mark “need” next to those that are essential to eating, living and working (groceries, mortgage payments/rent, utilities, transit fare, etc.). They can then identify unmarked expenses to reduce or eliminate in order to lower household spending.
-
- Start saving. If this revised financial plan seems liveable, the team should immediately put it into action. Depositing a certain amount of funds into an account every week is also important to build savings…or...
- Immediately seek professional help. If this plan does not provide enough money to sustain the household, it’s vital not to build debt. Putting daily expenses on credit cards or taking out a payday or debt consolidation loan or refinancing the mortgage are only band-aids that mask festering financial problems. Instead, this is the time to seek a financial professional to devise an effective treatment. Qualified experts (those affiliated with professional associations) have experience and knowledge to help those who are financially challenged reduce debts, fees and interest payments and to avoid penalties and legal actions. They can provide objective advice regarding the healthiest treatment option to achieve optimal financial well-being. Solutions may range from budget coaching, to credit counselling, financial reorganization or consumer proposals
In fact, in today’s challenging economy, proposals are proving to be one of the most effective remedies for individuals owing money they are unable to repay. A proposal is a legally binding agreement to repay creditors a portion of the total amount owed over a period of up to five years, according to a person’s financial capability. When a proposal is filed, interest owed on outstanding debts immediately stops, as do creditor phone calls, garnishments and liens. Since counselling to help individuals identify the issues that may be causing financial stress is part of the process, by the end of the proposal period, individuals are not only free of debt, but generally feel less anxious and healthier.
The next time a patient complains of physical ailments related to money stress, keep in mind these potential remedies. Recommending the five-step financial plan can complement your medical treatment and help your patients begin the journey toward long-term well-being.
Brian Pritchard, CGA, CIRP, trustee in bankruptcy (bpritchard@bdo.ca, 905-436-9100) is a senior vice-president of BDO Dunwoody Limited.
* The Associated Press-AOL Health Poll, 2008
