The disruption that the coronavirus outbreak has caused to our everyday lives has negatively impacted many people’s mental health. One of the biggest issues it has caused is a heightened anxiety about money, with millions of Brits having been made redundant or furloughed.
If you have loved ones who have been financially impacted by the virus, it’s easy to worry about their wellbeing. According to a report by Aviva, two in five people reported that they had been losing sleep due to financial worries.
Supporting your family through this difficult time can be very important, so read on for three ways that you can help your loved ones deal with financial stress.
1. Help them to stay on track with a budget
If a loved one is worried about their bank balance, they may stop looking at it altogether. Whilst burying their head in the sand may help them feel better in the short term, their problems won’t go away simply by avoiding them.
Furthermore, it might sound counterintuitive but one of the ways that people often deal with stress is by spending more money on comforts, such as good food or new clothes. This can create a vicious cycle.
If you have a loved one who is letting financial stress get in the way of sensible spending habits, you may want to sit them down and help them to set up a new and realistic budget.
Keeping track of their monthly incomings and outgoings can help your loved one to find areas where they may have a shortfall.
If they do, you can help them by highlighting areas where they could save money, such as by cutting down on luxuries such as new clothes or takeaways. Monthly subscriptions, such as gym memberships, can also be a good place to make savings.
Once you have helped them to cut down on luxuries, you could also help them to reassess their spending on essentials.
For example, you could search for a cheaper utilities provider with them or even help them with meal planning, ideally including the cost of the ingredients. This can be especially helpful for young adults who have recently left home.
Sitting down with your loved ones to set up a simple and practical budget can be a great way to reduce their financial stress. Not only can it help them to live within their means, but it can also give them a sense of control, which is essential for resisting the urge to comfort buy.
2. Direct them towards help
It can sometimes be hard to talk about money, especially since many families still consider it to be taboo. However, hiding money worries may increase the stress as the root problem isn’t being addressed.
If you’re concerned that a loved one has financial troubles that are causing them stress, one of the best things you can do is to help them talk about it. This might be either through talking to you, or another family member they feel comfortable with, or by pointing them in the direction of organisations who can help.
The debt charity StepChange help over 650,000 people each year to repay their debts and get their lives back on track. They provide a variety of practical solutions, including Debt Management Plans and Debt Relief Orders, so your loved one can find the right solution to fit them.
Another charity which may be able to help is Citizens Advice, who offer guidance for people who are struggling with their finances.
Whilst these charities may be able to help, it’s also important for your loved one to speak to their bank, credit card company, and loan provider.
Furthermore, if your loved one is self-employed, you can help them to check if they’re eligible for any government support schemes. You can search the government website to find out what resources and support they may be entitled to as a business owner.
Since the coronavirus pandemic has impacted many people’s finances, there are now more ways than ever for your loved one to seek support for their money issues. If you want to help them gain a sense of control, it can be important for them to know where the support resources are.
3. Offer to help if you can afford to
If you have a loved one whose financial troubles are causing them stress, it’s natural to want to help. As we’ve previously discussed, this might be by giving advice and support, or you may want to offer to help them financially.
If you would like to help, you may first want to consider how they will react. It can sometimes hurt a person’s pride to accept money, which may make them refuse.
If they are willing to accept help, this can be a good short-term way to alleviate their financial stress. However, you may also want to encourage them to seek financial advice so that they’re able to better withstand economic strain in future.
Whether it would be with a one-off gift, a loan, or regular income until they get back on their feet, it’s also important to ensure that you can afford to offer financial help. This is where seeking professional advice can be crucial.
Speaking to a financial adviser can be a useful way to assess how much you can afford to help a loved one without the cost of your gift or loan impacting your financial plans.
An adviser may also be able to help in non-financial ways too, such as by offering useful advice or providing the names of organisations which could help your loved one to manage their financial stress.
Get in touch
If you’d like to discuss any issues surrounding financial stress or are considering providing financial support to a loved one, get in touch. Please email info@investmentsense.co.uk or call 0115 933 8433.
