Taking care of your financial wellbeing

The link between money worries and mental health problems is clear but, fortunately, there are some simple steps you can follow to keep your cash concerns under control. Fiona Thomas explains how you can become saving-savvy

CREDIT: This is an edited version of an article that originally appeared on Happiful 
A single bead of sweat drips down my clammy back, even though it’s the middle of winter. My face is flushed, and I feel lightheaded as my thumb rests on the fingerprint button of my ‘phone. I log in and wait an agonising few seconds for the figure to appear on the screen – the number that will dictate the tone of my day, the amount of cash I have to my name. As the figure appears in black and white, I breathe a gentle sigh of relief. Phew. My bank balance isn’t (currently) in the danger zone, so I can afford to get some groceries on the way home this evening.
This is a process I go through almost every day, habitually checking, and rechecking, my bank balance to make sure that I can afford to buy the things I need in life. Food, bills, travel costs and, of course, the little extras that privilege provides, like a new lipstick or a fancy bottle of gin.
Worrying about cash flow creates a horrible, sinking feeling but it’s one that constantly bubbles away under the surface for many of us. Two-thirds of those aged between 22 and 38 say that money worries keep them up at night, with debt, bills and mortgage payments ranking highly on the list of concerns. Another survey found that one-in-four Brits admit they would struggle if faced with a long period of unpaid sick leave, and 23% would not be able to cope with the expense of a broken boiler.
The link between money and mental wellbeing is clear, and it’s one that we can work to strengthen in a positive way, says money coach and mentor Emma Maslin. “At its heart, financial wellbeing is about acknowledging our emotions around money, feeling in control of our finances, being able to withstand financial unpredictability and unexpected expenses.”
With a quarter of people in the UK believing that poor financial wellbeing is a significant cause of stress in their workplaces, it’s clear that many of us need to address our relationship with money.
Rooted in childhood
The emotions we feel towards money are closely linked to the beliefs that have been instilled in us from a young age. For example, if you were brought up being repeatedly told you that you shouldn’t talk about money, then you may exhibit avoidance behaviours as an adult. If you were taught to be vigilant with money, then you may find it difficult to spend money as an adult, even if you are financially stable.
To make things worse, social media creates a warped reality that pressures people into spending money on the wrong things. A poll commissioned by BBC Radio 5 recently found that more than a third of 20 to 29-year-olds agreed that social media posts by influencers made them spend money they otherwise would not have wanted to spend.
I spoke to psychotherapist, and Counselling Directory member, Paula Coles, who has observed young people distracting themselves with small purchases as a way to self-medicate. “People might compulsively shop, or try to buy ‘the appearance ideal’,” says Paula. “Others may find themselves prioritising things such as escapist holidays over establishing an everyday home life that they enjoy.” 
This behaviour, inevitably, impacts future wellbeing; 16 million people in the UK have less than £100 in savings, according to a Money Advice Service survey.
Dazed and confused
Alongside unnecessary spending, debt worries and mental blocks perhaps the most frustrating threat to our financial wellbeing is a lack of understanding. With terms such as ‘effective annual rate’, ‘loan-to-value’ and ‘compound interest’ it’s no wonder that 77% of UK adults are confused by financial jargon. Six million of us have racked up late fees due to a misunderstanding of language, and others have seen a negative impact on their credit scores.
This can lead to further difficulties and general avoidance behaviour because people don’t know how to make changes for the better. Paula says that education and awareness around financial matters can be hugely powerful for our wellbeing.
“In psychotherapy we talk about individuals flourishing when they have a positive internal ‘locus of control’, meaning that an individual feels they have personal power in their life and, therefore, they make positive choices,” she says. “By increasing awareness of complicated topics – such as pensions and taxes – a person might develop a stronger internal locus of control, be less avoiding, and more able to make informed choices about how to manage their finances.”
So, here are some expert tips on how to improve your financial wellbeing…
Get practical – Claire Roach, money saving blogger at Daily Deals UK
“The best way I learned to manage my finances was to write down absolutely everything. I write down every penny I earn and spend. I use Google Docs to make spreadsheets to easily keep track of my income, outgoings, spending, and savings. You can also find plenty of free, printable templates online. Writing everything down has made a huge difference to my spending habits and my financial wellbeing. I don’t tend to overspend so much and I have managed to keep to my savings goals.” 
Plan – Chloe Rowlands of TIC Finance
“Look at the long-term as well as the short-term – try to look ahead with your finances. Where do you want to be in five-to-10 years? Are you thinking about your future with a pension, or spending on unnecessary things that are only bringing you temporary joy rather than long-term stability?”
Set a goal – John Ellmore of knowyourmoney.co.uk
“Creating a savings pot can help you control your spending by encouraging you to work towards a specific goal; this could be anything from a house deposit, to a holiday. By putting away a dedicated amount of money every month, you’ll become more mindful with your purchases, knowing that this self-control will be rewarded.” 
Although we can’t make money grow on trees, we can change our spending and saving habits to minimise money-related anxiety.
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