by Cody Hodge

Created on: November 06, 2009

How can financial problems impact your financial health? Well, there are many ways that you can define health, and there are many ways in which you can define what a financial crisis is. It is all relative, so there really are many ways in financial problems can lead to financial health problems. However, just like our body isn't always sick, our financial picture is always gloomy, so how does a slight financial illness hurt our financial health?

You can wake up one day, and realize that you are only a couple of years away from an early retirement. You have saved your entire life, and never have taken a risk that wasn't necessary. You have thousands in the bank, and have made some good investments. All of sudden you are hit with some heavy medical bills as the result of some unexpected illness. How does this hurt you? It hurts you in a lot of ways actually.

The medical bills are going to be high even with the best of insurance. With insurance companies looking for ways to simply deny coverage as best they can, and even the best of insurance rates going up drastically, it can hurt you there. If you don't have insurance, or the medical bills outrun your insurance, you can be forced to dip into your retirement fund, or your savings.

From there, you might have to dig into some retirement accounts, and the taxes hit you too. If you have a traditional IRA, and you withdraw before you hit retirement age, you have to pay income tax on that income, plus a fee on top of that. That hits you three times, and is never something that you have to want to to deal with.

Of course, you can have any sort of financial trouble, and for some, it might not be a big hit. You could need a new car, need to go to the dentist for a root canal, or just lose your job out of the blue. If you can afford it, you might not blink an eye, but unless your make millions a year, you are probably going to have to adjust to make sure that you still have enough for the future without having to sacrifice too much today.

Financial problems are never fun, simply because they usually aren't our own fault. They are just a combination of things that are usually out of our control, and they can make life miserable for us. However, it won't happen forever, and hopefully you can get out from under the pile of new debt.

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