MONEY matters

Mark Zaifman's thoughts on money, global economic trends and politics

Financial Stress is Often a Result of Poor Money Management Skills

Mark Zaifman   |    Thu, Sep 13, 2012 @ 08:56 AM

Financial Stress is a result of Poor Money ManagementBased on a recent trip back east to visit my elderly parents and in-laws, I realized that for some, stressing over money never ends.  Even though I have reviewed both sets of parent’s financials and showed them they are in fine shape, they still worry that they won’t have enough to last their lifetimes. The one difference is that for both of them, their first priority is making certain the kids get an inheritance. In our case, our parents have plenty of money to see them through the end of their lives, and the inheritances they planned on giving are a reserve to dip into should they need it. I imagine it is part of that generation in having a legacy of giving – so unlike the bumper stickers I often see affixed to RV’s stating “I’m spending my kids inheritances.”

So in addition to working Americans, it appears the retired and even the elderly feel stressed about money and often the cause was that they did not have their financial houses in tip top shape.

With glimmers of hope in the changing economy, many folks are less stressed now than say 2-3 years ago, yet many working Americans are still under financial strain. You wouldn’t think this would be the case, but according to a study by El Segundo, CA, based Financial Finesse, even the least vulnerable demographic groups,  a) men between 55-64, and b) workers earning between $150K-$200K annually, are experiencing stress around money.

The study also stated that 83% of employed men have financial stress and for working women, it’s a bit more at 90%.

And the main reason for all this stress? The Survey cites poor money management skills by revealing a direct link to the ways Americans manage expenses, control their debt, and pay bills.

That said, even the folks who stated they weren’t all that stressed about money really should have been since many are clearly not prepared for retirement and do not have long-term plans in place. Their plan is often revealed as “I’ll just work until I die”, which clearly is no plan at all.  As I often see, people like this are unfortunately far too casual about the importance of retirement planning. Of the 67% surveyed who reported no financial stress, less than half of them have only the basic estate-planning documents in place. They are leaving their assets wide open and vulnerable which is truly a cause for worry.  In this case a little stress would do them a world of good.

And for people like my parents and in-laws, well, I think they actually need something to worry about - it's just who they are.


Click me


Image credit http://www.flickr.com/photos/topgold/