Financial Stress in Times of Transition

Financial Stress Adaptation

By Rick Kahler CFP®

Stress is what happens when something you care about is at stake. This definition comes from Susan Bradley, CFP, author of Sudden Money and a specialist in the financial aspect of life transitions.

The stress around these transitions is a common reason that people seek out financial advice. We tend to be driven to consult advisors as a result of stressful changes in our lives, such as a divorce, a sudden money event like an inheritance or insurance settlement, an investment or job loss, retirement, or the death of a loved one.

While all these life events certainly have financial components, it’s almost always the emotional components of the change—how we respond to them—that are the cause of the stress.

Any change includes three stages: an ending, a period of passage while we relate and adapt to the change, and a new beginning. This period of transition can be fraught with emotion and behaviors that can trip us up in many ways, including financially.

Susan identifies nine such emotions and behaviors that she sees commonly in people in transition.

1. Lack of identity. If the transition results in the loss of a familiar role—spouse or employee, for example—you may struggle with “Who am I now? “There is often confusion and ambivalence about the future, and an inability to make decisions.

2. Confusion/Overwhelm/Fog. There is a sense of defeat by everything. You may physically slump, have a glazed-over look, and ask others to repeat a lot. It’s hard to understand, be present, respond, focus, or move forward.

3. Hopelessness. You may have a sense of having given up, not being in control of your fate, or being a victim. It may seem that there is nothing you can do to change yourself or the outcome. Financial decision-making is very difficult.

4. Invincibility. This can happen with a big positive change in your finances. You may think everything is going to turn out fine. You may feel euphoric, confident, and smarter than your advisors. You may spend more and take greater investment risks.

5. Mental and Physical Fatigue. Change can be exhausting, and the exhaustion can go undetected by others and even yourself. You may have difficulty following an agenda and tasks.

6. Numb/Withdrawn. You may feel ambivalent about and indifferent to exploring the changes in your life, what you want, and what the future may hold. You don’t give much feedback and are withdrawn and non-expressive. You may miss or not return phone calls or emails. The planning process often comes to a standstill.

7. Narrow or Fractured Focus. You may either be preoccupied with one area that excludes everything else or have an inability to focus on anything. In either case, focusing on what’s important becomes difficult or impossible.

8. Inconsistent Behavior. This is the inability to hold to one position. Instead, you may change your mind repeatedly or switch between opposite positions. You are uncertain and often embrace opposites in your wants and desires in the same breath. Making decisions become impossible.

9. Combative. You may hold on to feelings of anger, resentment, victimization, and rage regardless of the facts. You are outwardly emotionally expressive and challenging. You don’t respond well to logic and practicality. A combative person doesn’t have problems making decisions, but does have difficulty making good decisions that are in their best interests.


Emotions and behaviors like these are generally temporary. Financial decisions made in the midst of transition-based stress, though, can have lasting negative consequences. The support of trustworthy advisors can be invaluable in navigating through both painful and joyful life changes.


Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™


2 Responses


    A few weeks ago [above] I wrote about the importance of having a “Plan B” for aging when life events take an unexpected turn. Among the most common of these events are sudden and unforeseen health challenges that leave you unable to fully care for yourself.

    The day after that column ran, I received a call from a client. She said, “Rick, I need to come in and see you. I need a Plan B.”

    She had been diagnosed with a progressive disease that would leave her unable to fully care for herself within months. The diagnosis had forced her to quit her high-profile job in which she managed a large staff and traveled extensively. Her world was about to become incredibly small.

    As we visited we tried to envision life as it would soon become.

    The first thing we talked about were the services she would need to keep her living as independently as possible. We determined initially she would need to hire a housekeeper and a bookkeeper. For meals she could use a mixture of Meals on Wheels and a delivery service that would bring meals from a number of local restaurants. She would use a local errand service for household supplies and shopping needs. To get to doctors’ appointments and for other transportation needs she would use Lyft or Uber.

    We also determined that the cost of retrofitting her two-story home would be prohibitive. It would be preferable to purchase a new one-level home that could be further remodeled to accommodate her needs. We also decided it would be prudent for her to get on the waiting list for a local facility that provides residents a full range of options beginning with independent living apartments and progressing to assisted living and nursing home care. The current time it takes to get into the facility is about three to five years, so this is something that must be anticipated in advance.

    One of her major concerns, of course, was whether she could afford the increased cost of these additional services and a new home. We estimated the increased costs. We then determined current expenses that she would no longer have, such as travel and all the costs associated with maintaining a car. She was relieved when I tallied all this up and determined that—in large part because she had invested to provide for her retirement—she would be able to afford the lifestyle changes.

    Our attention then turned to the next stage of her disease, for which there was no timeline. We needed a “Plan C” for when she would need further care and oversight.

    As a single woman without children living nearby, she had no one locally that she could really turn to as an advocate. We found a local elder advocacy firm—a relatively new service in our community—that could offer her a variety of services. These included:

    * Oversight of her financial affairs, including bill-paying and bookkeeping.
    * Serving as a medical advocate, including attending medical appointments with her, managing insurance claims, and coordinating records and services among her multiple medical providers.
    * Holding her health power of attorney.
    * Serving as her legal guardian if and when she should require it.

    After we created this detailed “Plan B,” my client left the office with a sense of relief. Given her medical diagnosis, she was still facing a frightening, life-changing path over which she had little to no control. Knowing she had tools and resources available to help meet her needs could not remove the challenges ahead of her.

    Yet having a plan to use those resources would make her difficult path just a little easier.

    Rick Kahler CFP®


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: