In my earlier bankruptcy blog, I shared insights gained from reading professional journals in the field of employee benefits. Another area I enjoy reading about is financial planning. As a bankruptcy attorney in Indiana, I find learning from colleagues in related professions helps me provide the best advice to my own bankruptcy clients.

Dennis Holland, vice president of First Command Financial Services, had the most interesting research to share about how people’s mental health relates to their financial health. First Command found that “individuals who engage in the disciplined process of saving money on a monthly basis experience an emotional ‘high’ in their feelings of financial security over those who do not.” What is so fascinating is that, according to the research, it doesn’t matter whether an individual’s actual savings balance is high or low. It’s the process of putting money away consistently that drives feelings of confidence and optimism.

The other side of this research is the effect of debt on the middle income consumer. The study found that short-term debt most affects individuals’ feelings of financial stability. The more credit card and personal debt a family carries, the Journal reported, “the less financially secure they feel, the less optimistic they are, and the more stretched they feel on a month-to-month basis.”

As I described in my blog In Bankruptcy, Forgiveness Means More Than Discharging Debt, often people facing bankruptcy are under extreme stress and have low self esteem. A big part of my work as their bankruptcy counselor is helping them see past that stress so that they can make the needed decisions and navigate the bankruptcy court process. Once the legal part of the bankruptcy is completed, the rebuilding process can begin. Dennis Holland says, “As the rate of savings to debt increases, families feel increasingly optimistic and less stretched.” That is exactly the effect I witness every day in clients as they gain some relief through the bankruptcy process and are in the process of rebuilding their financial lives. They feel increasingly optimistic and confident about their future, and less and less stretched. Helping my clients get to that stage of rebuilding their emotional health along with their financial health is really what the work I do as a bankruptcy attorney is all about.