3 useful ways to manage your financial wellbeing and alleviate money-related stress

Published on June 28, 2022 by Andrew
Three rocks balanced on a wooden post on a UK beach

The UK’s cost of living crisis is leaving many households struggling financially, but there are health and wellbeing implications to consider too.

According to an Independent report back in February, money is the biggest cause of arguments within couples. But money worries can also increase individual anxiety, with those already facing mental health struggles more than twice as likely to feel anxious about money.

Keep reading for a look at some simple techniques that could help to alleviate money stress and improve your financial wellbeing.

But first, let’s take a closer look at the figures.

Money stress can affect us all at any time 

A recent Money and Pensions Service (MaPS) survey questioned more than 10,000 UK adults and found that:

  • More than a quarter (26%) of people with no recent history of mental health challenges reported that thinking about their finances made them anxious
  • Those who had experienced recent mental health challenges were more than twice as likely (57%) to answer that their financial situation induced anxiety.

The research also found that respondents who had experienced mental health issues in the last three years were more likely to experience serious money problems.

This is especially significant in the context of the coronavirus pandemic, which according to the Office for National Statistics (ONS), saw more than half of UK adults report “high” anxiety between 20 and 30 March 2020.

The MaPS survey found that those with previous mental health challenges were:

  • More than twice as likely to confirm that thinking about their financial situation made them anxious
  • Four times more likely to be behind on household bills
  • Four times more likely to be borrowing to pay off debt and three times as likely to borrow money to buy food or cover bills when they run out of money.

Caroline Siarkiewicz, chief executive officer at the Money and Pensions Service, confirms that “money worries and poor mental wellbeing often go hand in hand”.

She adds that “This is a challenging time for many people dealing with the after-effects of the pandemic and cost of living pressures […] but can be particularly challenging for people also dealing with a mental health problem. If you are struggling, know that you are not alone, and that help is available.”

3 simple steps to manage your finances and your mental health

1. Keep your budgeting under control

Back in April, we looked at 5 simple budgeting tips for battling the cost of living crisis and suggested:

  • Keeping track of your income and outgoings to identify disposable cash
  • Breaking your monthly expenditure down into “needs”, “wants”, and “savings”
  • Using the “50/30/20” rule to ensure your money goes to the right places
  • Building and maintaining an emergency fund to cover an unexpected loss of income
  • Ensuring you pay your future self first by saving into pensions and investments.

You might also think about removing temptations. If you are feeling particularly worried about your finances, this anxiety could lead to you overspending or losing control of where your money is going.

A stringent approach to budgeting will help, but so too could deleting shopping apps, removing one-click purchase options, or leaving items in your online basket overnight before committing to a purchase.

At The Pension Planner, we use sophisticated cashflow modelling tools to help build a long-term plan aligned to your goals and robust enough to deal with whatever the future holds.

2. Consider taking out financial protection

If you are already struggling financially, further expenses in the form of monthly insurance premiums might seem like a bad idea.

But protecting yourself and your loved ones could be cheaper than you think.

You might consider:

  • Income protection to cover loss of income through accident or illness
  • Critical illness protection to provide financial support and ensure household bills can still be paid if you are diagnosed with certain serious conditions
  • Life insurance, especially where you have dependents reliant on you for help with mortgage payments.

Not only will you and your loved ones be financially covered, but you’ll have peace of mind that they will be looked after, giving you confidence and a sense of control over the unexpected.

3. Speak to the experts

At The Pension Planner, our dedicated team of finance professionals have decades of experience helping our clients manage their money.

With the cost of living rising, household energy bills soaring, and war in Ukraine affecting global markets, feeling anxious about your finances is understandable. But there are steps we can help you to take.

We will look at your finances holistically and take all of your income streams and potential outgoings into account. This allows us to build robust long-term plans aligned to your future goals while you continue to live stably in the present.

Get in touch

If you are worried about the effects of the cost of living crisis on your everyday household spending or your future financial stability, we can help so get in touch now. Email info@thepensionplanner.co.uk or call 0800 0787 182.

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