How to Achieve Financial Wellbeing
Few things take hold of our mental health in quite the same way as money worries.
Our financial wellbeing often changes throughout our lives, but whether you’re facing redundancy, managing an inheritance, or enjoying a bonus, planning and preparing for financial fluctuations can help you to feel far more peaceful about life’s inevitable ups and downs.
Money and Mental Health
Financial wellbeing centres on security. If you have enough money to cover the basic costs of living (whatever that is for you), plus a little leeway to enjoy life, your sense of comfort tends to increase and you often feel more confident about the future.
But it’s also important to think about your relationship with money.
“More important than our ability to earn money is our attitude towards it.”
For accredited financial education and wellbeing specialist Ryan Briggs DipFA, this quote perfectly encapsulates the essence of financial wellbeing; highlighting the need to focus on the psychology around money, and our relationship towards it.
As Ryan observes: “Your financial wellbeing doesn’t discriminate against or favour your age, your personal or family situation, your salary or what you have or don’t have in the bank. With so many other things to think (or worry about), it can become overwhelming to even address our financial wellbeing, which negatively affects our mental, physical and social wellbeing.”
Prioritising your financial health is critical, because it’s so closely linked with your mental health. The biggest snag here is that if you’re struggling with your mental health, dealing with your finances can feel incredibly overwhelming. There are also certain conditions, such as the ‘manic’ phase of bipolar disorder, that can lead to spending beyond your means.
Facing debt creates an enormous amount of stress, which in turn can lead to depression. It’s also harder to manage your money when you’re feeling low: opening a bill or talking to your bank might trigger anxiety – creating a vicious cycle that can impact your earning potential, raise your insurance premiums, and stop you from socialising.
But how do you avoid getting to that point? And if you’re there now, how do you get out of it?
Seven Steps to Better Financial Health
Be open about your needs: If handling your finances triggers anxiety or panic, you might want to think asking someone you trust to open your bills and letters. Online banking is also a great option for anyone struggling with their mental health as it can feel more manageable; alternatively, notifying your bank of a mental health condition means they’ll be able to adapt their procedures to suit your needs.
Understand where your money is going: Tracking what you spend your money on is the first step in gaining an element of control over your finances. Using a spreadsheet or tracker to monitor what percentage of your finances is going on needs vs. wants can be incredibly helpful. It’ll also help you to spot trends (such as spending more on a Monday to make you feel better about the start of a new working week).
Note important dates on the calendar: Whether you make payments manually or via Direct Debit, writing due dates on a physical calendar can help you to keep track of when payments need to be made, and get a handle on how much disposable income you have for the rest of the month. Mark your ‘payday’ on the calendar, or if you’re a freelancer, make a note of when invoices are due.
Set yourself a budget: The simplest way to give yourself a daily budget is to take your total income for the month, subtract any bills/other regular outgoings, then divide whatever you have remaining by the number of days in the month. Anything you don’t spend one day can either be rolled over into the next, or put into savings.
Open a savings accounts: Even if you only make small payments to begin with, get into the habit of putting at least something into savings at the beginning or end of every month. As you get more on top of your money, you can choose to increase the amount you save. The trick is in creating the habit, and building on that.
Be mindful of your credit habits: You should only ever apply for credit if you really need it. If you’re taking out a loan, it’s important to shop around and get quotes from at least three lenders so you’re sure you’re getting the best deal possible. Set reminders for repayments, and if you’re going to be late for any reason, notify your lender as soon as possible.
Reduce your debt: Paying down your debt is one of the most effective ways to restore financial wellbeing, and give you peace of mind. Consumer Finance has designed a really useful debt log to help you keep track of what you owe, along with a tool that will help you to choose the best debt reduction strategy for you.
Getting Help with Your Finances
You should never feel ashamed of needing help when it comes to getting your finances in order. Few of us are financial experts, and financial wellbeing is an area that many people seek extra support with. Trusting a financial support service or financial advisor is the most sensible thing you can do when you’re facing money worries.
Financial expert Ryan Briggs recommends the ‘PAWA’ approach to financial wellbeing, and advises people to look at:
Where you might sit on the Personal financial wellbeing scale
What Areas you need to focus on
What support, education, guidance or advice is available
What Action you can take yourself, or with the help of someone you know and trust
You can get advice on debt and finances through the Citizen’s Advice Bureau – including help with debt and budgeting, debt solutions, pensions advice, and help with mortgage problems.
There’s also the government’s National Debtline, which provides free, confidential, and independent advice on dealing with debt problems in the UK. You can call them on 0808 808 4000 Monday to Friday, 9am to 8pm, and Saturday, 9:30am to 1pm.
Article by Emma Attenborough-Sergeant, The Wellness Writer. Helping leaders to improve culture with relatable mental health and wellness content.