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Personal financial distress: Causes

10th May 2018
The good in online interactions and the way forward in Blogging
30th April 2018
“I will be back on my feet again.” How to deal with personal financial distress
10th May 2018

Beginning our focus this month on how to deal with difficult personal financial economic times. Personal financial distress in a nut shell happens when expenses exceed income. Some of the factors that cause personal financial distress include;

  1. The loss of a job. Most people make an income from a job, when one loses ones job then inevitably financial distress can occur more so if one had no savings or emergency fund to cushion one during hard times.
  1. Reduced income. This may happen if one undergoes a pay cut or say if ones business hits a bottle neck and is not generating as much revenue as it used to in the past and yet the expenses remain the same.
  1. Poor money management skills possibly due to no formal education on money. A negative attitude towards financial health. Living beyond ones means comes to mind. In this day and age where consumerism and “show it offism” is the order of the day one may be tempted to put up appearances, making purchases beyond ones income stream instead of living within ones budget.
  1. Little or no savings to fall back on during hard economic times. Savings is money set aside for anticipated future consumption. People forego current spending so as to plan for future events e.g. children’s education, schooling. Savings are extremely important to cushion one during challenging times e.g. loss of a job, sickness expenses beyond which insurance may not cover.
  1. Overwhelming debt. This is closely related to poor management skills where people borrow more than they can adequately pay off and worse still borrow for consumption purposes as opposed to for investment purposes.
  1. Divorce, separation or death of a spouse. One of the main reasons people get married or have partners is for financial strength. Two heads are always better than one.  Sadly, money matters are also the greatest cause of marital breakdown, when the two partners cannot agree on income, expenditure and investment purposes. Divorce, separation and death are leading causes of financial distress with many bearing a bigger financial burden especially if the former spouse was chipping in the upkeep of the family.
  1. Illness and medical expenses incurred. This is especially difficult if one has no medical insurance and even then sometimes medical expenses go beyond insurance limits. This is a cause of great personal financial distress.
  2. Catastrophes that cause loss of personal wealth e.g. fire, floods, theft.
  3. Gambling
  4. Alcoholism and Drug addiction.

Many alcoholics and drug addicts find it very difficult to sustain a job or income generating venture.  Even for the few who do, the income that is generated goes to maintaining the alcoholism and drug addiction.

Can you think of other factors that cause personal financial distress?

Next ,  we will dive right into how to deal with difficult personal financial times.

May 2018 – Soaring in building my personal brand – a focus on personal financial management during personal financial distress, etiquette and grooming.

Kwambie Nyambane
Kwambie Nyambane
Kwambie Nyambane is a Sales Force Effectiveness Manager in a leading bank in Kenya 'by day', a passionate inspirational blogger 'by night'; and a wellness enthusiast championing healthy lifestyle choices. The founder and lead writer of this blog is a Bsc. Food Science and Post -Harvest Technology graduate of the Jomo Kenyatta University of Agriculture and Technology, Kenya, holds an MBA in Marketing from the University of Nairobi and is currently pursuing a PhD in Business Administration from the University of Nairobi. Kwambie is a member of Bloggers Association of Kenya. She believes in taking life with a big spoon, seeing the cup always as half full, and enjoying the scenery in this journey called life. Kwambie is daughter to Lilly Moraa and James Nyambane, mother to one beloved son nicknamed "The Champ"; sister to Marci and beloved auntie to the A & Z girls. She and her family make Nairobi City, Kenya their home. This blog is dedicated to her parents Moraa and Nyambane for their awesome inspiration in her formative years, for being her pillar of strength through life, her siblings Marci and Joash, and to her son "The Champ" and her nieces who represent the generation that came after her. May the nuggets contained in this blog serve many generations, the world over to come.

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