A fresh start? Talking about financial worries

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We won’t be alone in hoping for the New Year to be the start of a more positive period. A year that will surely enable everyone to get a vaccine, and with it, bring togetherness, happiness, better health and prosperity. And whilst we keep our fingers crossed that 2021 will bring all these things, we will also need to be realistic in that the events of the past year will impact us for some time to come. Ultimately we will all need some time to adjust after what 2020 has thrown at us and in all likelihood our finances will be no different.

Financial worries

Did you know that money worries can affect up to 72% of the population at any given time?

Worrying about your finances may well be one of your concerns as we head into the New Year and certainly you wouldn’t be alone in feeling like this.

Whether your financial concerns stem from a loss of work, escalating debt, unexpected expenses, or a combination of all these factors, financial worry is one of the most common stressors in modern life.

And, just as any source of overwhelming stress, financial problems can have a huge impact on our mental health too. For instance, as a result of money worries, we can suffer from a lack of sleep, our relationships with others can suffer, our energy levels can dip, we can put on weight, or we can lose motivation in work or our passions.

On some occasions, the pressure may be so significant that a person may try to “escape” through unhealthy coping mechanisms, such as drinking, abusing drugs, gambling, overeating or self-harm. In the worst circumstances, financial stress can even prompt suicidal thoughts or actions. However, no matter how hopeless one’s situation may seem, there is always help available.

A vicious cycle

A number of studies have demonstrated the cyclical link between financial worries and mental health problems. It really can be a vicious cycle.

  • Financial problems adversely impact your mental health. The stress of debt or other financial issues can leave people feeling depressed or anxious.
  • The decline in your mental health makes it harder to manage money. People may find it harder to concentrate or lack the energy to tackle a mounting pile of bills. Or they may lose income by taking time off work due to anxiety or depression.
  • These difficulties then lead to more financial problems and worsening mental health problems. People can become trapped in a downward spiral of increasing money problems and declining mental health.

 

 

Here is our five-point checklist to help you break the cycle, ease the stress of money worries and begin to find stability again:

Talk to someone

When you’re facing money problems, there’s often a strong temptation to bottle everything up. Sadly, this will only make your financial stress worse. Instead, the answer is to talk about it. Not only is talking face-to-face with a trusted friend or loved one a proven means of stress relief, but speaking openly about your financial problems can also help you put things in perspective too. Remember the person you talk to doesn’t need to be able to fix your issues, they just need to listen without judgement.

Get professional help

Whether it’s managing debt, creating and sticking to a budget, finding employment, communicating with creditors, claiming benefits or financial assistance, there are plenty of options available. Whether or not you have a friend or loved one to talk to for emotional support, getting practical advice from an expert is always a good idea. Remember, reaching out is not a sign of weakness and it doesn’t mean that you’ve somehow failed as a provider, parent, or spouse, it just means that you’re wise enough to recognise your financial situation needs addressing.

Take inventory of your finances

If you’re struggling to make ends meet, do not bury your head in the sand. It’s essential to detail your income, debt, and spending over the course of at least one month so you have a full overview of where you stand. Make sure you include the following in the inventory; your income, your spending (however small it might be) and list out your debts.

A number of websites and smartphone apps can also help keep track of your finances too.

Make a plan—and stick to it

Just as financial stress can be caused by a wide range of different money problems, there are an equally wide range of possible solutions too. Once you’ve taken inventory of your financial situation, eliminated discretionary and impulse spending, and your outgoings still exceed your income, there are essentially three choices open to you: increase your income, lower your spending, or both. How you go about achieving any of those goals will always require making a plan and sticking to it.

Create a monthly budget

Setting and following a monthly budget can really help keep you on track and regain your sense of control. Remember to include everyday expenses in your budget too, such as groceries, travel, bills, rent or mortgage. When it comes to the larger bills that you pay annually, such as car insurance or council tax, divide them by 12 so you can set aside money each month. If possible, try to factor in any unexpected expenses too just in case. Where possible try to set up automatic payments to help ensure bills are paid on time and you avoid late payments or interest rate hikes. Finally – and perhaps most importantly – make sure others in your household are on board with the plan. Enlist support from your spouse, partner, or kids and make sure everyone in your household is pulling in the same direction and understands the financial goals you’re working towards.

Look, let’s face it, sometimes things might not go to plan, and that’s ok. Try not to get derailed by setbacks. We’re all human at the end of the day, and no matter how well you plan, things don’t always go to plan.

Don’t beat yourself up if you make a mistake. Rather get back on track as soon as possible and focus on the aspects you can control as you look to move forward to a more stable future.

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