{"id":8345,"date":"2023-02-01T08:00:13","date_gmt":"2023-02-01T08:00:13","guid":{"rendered":"https:\/\/emoneyadvisor.com\/?post_type=thought_leadership&p=8345"},"modified":"2023-01-17T21:17:17","modified_gmt":"2023-01-17T21:17:17","slug":"financial-advisors-help-clients-cope-during-times-of-financial-stress","status":"publish","type":"thought_leadership","link":"https:\/\/emoneyadvisor.com\/blog\/financial-advisors-help-clients-cope-during-times-of-financial-stress\/","title":{"rendered":"Financial Advisors Help Clients Cope During Times of Financial Stress"},"content":{"rendered":"

A sense of ambiguity about the future and financial stress is taking a toll\u00a0on our clients’ mental, physical, and relational well-being<\/a>. And because you care about your clients, you are probably feeling the strain as you work to help them cope.<\/p>\n

You’ve likely heard the saying, \u201cwhat doesn’t kill you makes you stronger,” and whether it’s from the original translation of Nietzsche or the more recent adaptation by Kelly Clarkson, it’s an outlook that continues to resonate within American culture.<\/p>\n

At the 2022 Financial Planning Association National Conference, I and fellow researchers Dr. Sonya Lutter and Dr. Megan McCoy presented research-based evidence that people who have experienced financial stress and hardship in the past are often more resilient in the face of future financial shocks.1<\/sup><\/p>\n

Financial Stress and How We Assess It<\/h2>\n

Since the World Health Organization’s declaration of the global COVID-19 pandemic, Americans have experienced prolonged mental, physical, emotional, and financial strain, compounded more recently by historic rates of inflation, political unrest, and other stressors, resulting in 81 percent of Americans reporting feelings of global uncertainty.2<\/sup><\/p>\n

Amidst all of this uncertainty, what can help individuals be more resilient in coping with financial stress? And how can financial planners help?<\/p>\n

Using Theory to Understand How We Manage Stress<\/h2>\n

Lazarus and Folkman’s stress and coping theory suggests that when faced with a stressor or stressor event, we first go through what they call a primary appraisal. During this appraisal, we unconsciously evaluate our ability to cope or overcome that stressor event. We assess if this stressor is relevant to us, if it is positive or dangerous, how much damage could result from it, and potentially most importantly if we have ever faced and overcome a similar threat.3<\/sup><\/p>\n

When we place this in the financial context, we are referring to our money experience. Our prior experiences and exposures around money (e.g., our financial socialization) could be key contributing factors to our financial attitudes, knowledge, and capabilities.4<\/sup><\/p>\n

Using data from the CFPB’s National Financial Well-Being Survey Public Use File (PUF)5<\/sup>, our team hypothesized the following:<\/p>\n