The Financial (and Emotional) Stress of Being Broke

Financial stress is something that often isn't talked about with friends or family. The social norm in North America is to not talk about money at all. It is seen as taboo- something that is slightly crass to discuss. That means that when people get into financial trouble, they often keep it inside and don't share it. Stress over finances is one of the leading causes of divorce and it can also exacerbate clinical depression and anxiety, which can make turning a financial corner even more difficult.

When I was a teenager living on my own, I knew what broke was. I lived off of a big bag of rice for a month. Sometimes, I added a smuggled sugar packet to make rice pudding. It was when I had a full-time accounting practice, though, that I really saw the effects of being over one's head in debt.

Many clients who came to me only to get their tax returns done opened up eventually about their financial situation and how desperate it was. Some were living a facade -- looking on the outside like they were doing well. They had expensive cars, mini-mansions, kids in private school and good jobs. What you can't see is what's behind the facade: a car company a few days away from repossessing the car, a bank starting the foreclosure process on the house and a school that has sent the fourth warning letter about fees.

People who are behind on payments may jump every time the telephone rings or there's a knock on the door. They may be afraid to be out in public with friends in case they are served with legal paperwork or their cars are towed. It can create fear that creditors will call the employer and the debtor will get fired for being a deadbeat.

This emotional stress can manifest itself as additional financial stress. Depression can make logical thinking and motivation difficult, which can affect a person's job performance, in some cases, leading to unemployment. A person in debt who feels hopeless often doesn't even take the first steps towards digging out of the hole. The situation seems insurmountable. People in a serious debt crisis can't plan out the future because they're not certain what will happen in the next week. They are conditioned to wait only for the next bad thing to happen.

If you feel like you're in a financial hole that there is no escape from, there is help. Start by meeting with an independent credit counselor who can look at your entire situation and help you sort it into manageable pieces. If your situation is truly dire, the counselor can discuss bankruptcy and other options, but the sooner you meet with someone, the more options you have. Don't let the emotional damage being in debt has done to you prevent you from being free from debt. It can happen. It's happened to many of my clients. And it will change your life.

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