FINANCIAL AND MENTAL HEALTH
Some hear the words Mental Illness and they think about the words ‘crazy and mad’. But no, mental illness does not only associate with those words but simply an uncomfortable and unsafe mental space of someone. In the times we are in I see how easy it is for someone to fall into a mental space that is not safe for themselves or the people around them. Honestly, it’s sad how the society and community that we stay in does not focus or recognize mental health as an important part of peoples’ health because the numbers are too high when it comes to the people that we are losing every day due to mental illness. There are a lot of factors that can lead someone into depression or mental illness and Financial Stress is at the top of the list. Most Kenyans have financial needs in their life but to the extent that it becomes a financial problem and stress, one needs to find ways to handle and take care of their Mental space.
Many of us are having to deal with some financial worries because of the times that we are in. In our country right now the economy is tough on the people, there are bills to pay, some loss of work for others, COVID-19 effects on the nation, and the escalating debts on many of the Kenyans right now. There’s a very real connection between financial stress and mental health. Financial problems may take a huge toll on one’s mental health very quickly and can cause stress and can have a significant impact on your mental health.
Mental health refers to cognitive-behavioral and emotional well-being. It’s about how people think, feel and behave. Mental health disruption may be caused by conditions such as stress, depression, and anxiety. The worst scenario is that financial stress can prompt suicidal thoughts or even actions.
Financial stress is a condition that is the result of financial or economic events that create anxiety or worry and is accompanied by a physiological stress response. Money anxiety is an uneasy unhealthy attitude toward engaging with and effectively administering personal finances. One might have certain signs like insomnia (worries an adversely impact your sleep), weight gain or loss, depression, anxiety, social withdrawal from family and friends.
Focusing on what you can control can not only help get your finances back on track but can also alleviate negative emotions as well. Here’s how;
- Plan your finances well
A financial plan will play a major role in initiating a stress-free state of mind. For many people, the worry stems from the fear of not meeting their financial goals.
- Reduce unnecessary spending
Reducing your spending is a good first step in having a plan for your finances. One should take inventory of their finances so that one has a much clear idea of their money. Tracking your finances in detail can also help you start to regain a much-needed sense of control over your situation.
- Manage your debt efficiently
Most people who are in debt are likely to be suffering from money anxiety. Sometimes, it’s also the fear of getting into debt that causes anxiety. Either way, debt can be avoided with a strong financial plan in place.
- Set a saving plan
Keep looking for ways to save money. Most of us can find something in our budget that we can eliminate to help make ends meet. Regularly review your budget and look for ways to trim expenses.
- Talk about it
They say a problem shared is a problem half solved. This statement truly applies especially in this scenario because you can find advice from family and friends regarding what to do or what steps to take. Except for advice, some may be open to the thought of helping you with your problems and debt.
At Citadel, our clients’ mental and financial state is very important to us hence we ensure that we offer appropriate professional assistance for all our clients.
LET’S TALK FINANCIAL THERAPY
In this society we are in, the term Therapy is not yet easily acceptable to many hence when one is in a difficult situation mentally and emotionally, it gets hard for them to go seek help. In the financial space, mental and emotional trauma do exist and many do experience this but maybe they don’t know how to categorize it. Do you know what Financial Therapy is?
By definition financial therapy merges finance with emotional support to help people cope with financial stress.
So it’s a process informed by both therapeutic and financial competencies that helps people think, feel and behave with money to improve overall well-being through evidence-based practices and interventions. Financial therapy is commonly known as counseling specifically for money-related issues or anxiety.
Improving your financial literacy may be the surest way to keep you away from financial distress. Financial therapy can help those who need to dig deeper into why they can’t stop living paycheck to paycheck or keep getting deeper into debt.
Many do think that a financial advisor is the same as a financial therapist. Well, that is not true. A financial advisor helps you manage your money not manage your feelings and emotions about money. Financial therapy differs from general psychotherapy because it focused on enhancing the financial well-being of a client.
There are a range of reasons why a person would seek out or need financial therapy;
- Unhealthy spending habits and a good example is compulsive shopping.
- Trying to maintain a lifestyle that is not in your means.
- A lot of debt. And it can be from different sources like Saccos or mobile loan apps.
- Hiding your finances issues from your partner.
- Financial trauma or anxiety.
A financial Therapist will help develop a detailed financial plan and most importantly, will help you set it up and implement it. At Citadel we have experts and professional Financial Therapists who will listen and help you when it comes to facing and dealing with your financial stress.
Due to how our society is designed, especially in Africa, we need to start talking more about Therapy and even make it a norm in our space and surroundings. Someone once told me that ‘The beauty of financial therapy is the fact that it gets to save a soul’ and I feel that this should be echoed out loud in society.
WHAT YOU NEED TO KNOW BEFORE TAKING A LOAN
Most people sign the dotted line of a loan application form without having the necessary information on loans hence many have a lot of problems when it comes to servicing their loans. Here is some basic necessary information that you need to know first before applying for a loan:
- Evaluate the main purpose or reason for taking a loan.
- Consider the interest rate that is being offered and compare them to the interest rates in the market.
- Consider how much you can afford to borrow and payback.
- Also, consider your credit score and credit history.
- Read through and understand the exact terms of the loan.
One needs to understand the different types of loans that are being offered.
- Salary advanced loan- refers to a short-term loan advance to a salaried customer depending on the bank’s profile to help them meet their emergency need.
- Personal loan- a situation whereby an individual borrows money for personal needs. A business loan- is a kind of financing one can avail to meet the urgent needs of a growing business.
- Secured loans- are loans that require some type of collateral as a condition of borrowing. Examples of collateral can be land, mortgage, or car.
- Unsecured loans- are loans that don’t require any type of collateral. Instead of relying on the borrower’s assets as collateral, the lender approves unsecured loans based on the borrower’s creditworthiness.
ART OF SAVING MONEY
Imagine that saving was as easy as eating a banana. Don’t you think that one would easily peel off the weight and stress of setting aside those few coins for the purpose of saving? Personally, I do understand the importance of saving but why does saving seem so hard and difficult?
Financial education should have been presented in school especially in our high school days. The reason is, one would have been mentally prepared and knowledgeable concerning finances in the ‘outside world’. Am saying the ‘outside world’ because in high school finances were something that most of the students were being provided for but then after school is done, one starts to provide for him/herself.
One financial strategy that I personally wish I knew more about earlier in my life but it does help a lot is Saving. Savings is the portion of the money that you put aside for future use. As much as saving money is very important it’s also very difficult sometimes. Some say that saving money is a form of ‘sacrifice’.
My first year of really trying to save money was slow and appeared difficult. I’ll share some of the issues I encountered and how I worked through them.
- Debt
Debt is increasingly becoming a challenge and problem in our society and it’s a huge barrier when it comes to saving money. Between mobile loans and student loans, saving money tends to be the last thing on peoples’ minds. However, I know that saving some money and paying off debt can be done at the same time. The good thing with saving is that any amount you set aside for saving is okay and enough so one can also pay off your debts slowly too.
- Not Generating enough income.
A high percentage of the people who are earning don’t generate enough income. It’s saddening that this is the reality that we leave in, that as much as one works hard, the income doesn’t reflect that. What’s enough income? My version of enough income is that that can cater to all your needs and still have some coins remaining. The route that helped me out in this issue, is the art of planning all your money well. When you plan and organize your income you may find a small window for saving some money from your income.
- Lifestyle Inflation.
Maintaining a lifestyle, you want is different from maintaining a lifestyle you can afford. It’s easy to splurge and be able to afford more things, but be careful because you can end up being comfortable spending more and then create a financial trap. Sometimes people get lifestyle inflation whereby as your income is not so stable, your spending continues going up. There are many people who have difficulty in saving because of this aspect. The way one can manage this is by trying to train oneself to use their money in an organized manner.
These are some issues that made me feel that saving money was hard but, as explained above, one can work through them and make saving money an easy comfortable task.
One may wonder how should I save? There are various types of saving your money;
- open a Bank Savings Account
- save through Sacco’s
- save through ‘Chama’
The accessibility of having to acquire or research something is readily available everywhere hence Financial Education can be accessed easily nowadays. So it’s very important for one to be Financially educated so that you can understand how to maneuver your financial world.
PLANNING THE KENYAN SHILLING NOTE
What do you think about the current state of the economy in Kenya? Personally, I think that our economy is taking a trip down the pit because of how ‘hard life’ is now. Every single item has been priced up for no reason hence life’s been hard. A good example is petroleum. We need to understand that petroleum controls most of the country’s goods so if the price of petroleum is high most of the items and activities will be priced up too because of the aspect that transport will be high.
Currently, when one has a thousand Kenyan shilling note, you can only acquire two to three food items from the nearest supermarket while ten years ago a thousand Kenyan shilling note would be used for a full house shopping. Kenya’s economy took a turn for the worst literary in a blink of an eye because one time a citizen could buy a 2kg maize flour at 50 Kenya shilling but today It’s at 135 Kenya shilling. That is such a big turn and change that affected every single citizen who’s depending on a packet of Unga to survive.
Who is to blame? When Kenyans are asked this question, a lot of answers do emerge. Maybe it’s the government, because of their actions on acquiring loans or the educational system for not providing financial education to Kenyans or it’s the high percentage of loan interest in Kenya or the high percentage of unemployment in the country or it’s the corrupt system that’s in place because of their misuse of funds or its coronavirus after all it has affected everything else. I agree that the COVID-19 pandemic did affect every single aspect of the world including the economy, but can we agree that the Kenyan economy was down on the rails even before the pandemic hit! But aside from the Kenyan economy in general, a Kenyan individual is also greatly suffering due to the economic instability in the country.
At Citadel Financial Services, we offer financial advisor services. A financial advisor is often responsible for more than just executing trades in the market on behalf of clients. They use their knowledge and expertise to construct personalized financial plans that aim to achieve the financial goals of clients. We also offer financial therapy whereby we get to plan with you your Kenyan shilling note for the purpose of your financial comfortability by assisting you to make logical financial decisions and help you deal with any financial issues that you may be facing.