This may come as no surprise, but money is one of the leading causes of stress around the world.
Indeed, statistics reported by Champion Health state that around 1.5 million people in the UK alone are experiencing both problem debt and mental health issues, with as many as 24 million adults stating they don’t feel confident managing their money.
You may expect heightened financial stress lately – the cost of living has climbed significantly over the last few months, having a knock-on effect on the financial wellbeing of many people.
Thankfully, there are steps you can take to limit the effect financial stress has on your mental health. And Mental Health Awareness Week, which runs between 15 and 21 May, could be the perfect time to assess your financial wellbeing.
So, continue reading to discover five ways you could potentially relieve any financial stress you’re currently experiencing.
1. Learn how to identify financial stress and then talk about it
Before you can deal with financial stress, it’s essential that you can spot the warning signs.
Some of the symptoms of financial stress include:
- Arguing about money with friends and family
- Withdrawing from others and the world around you
- Feeling guilty when you spend money
- Constantly worrying about your financial situation
- Having difficulty sleeping.
When you can properly spot the indicators of financial stress, it’s far more straightforward to tackle them – perhaps by talking with your loved ones. Yet, talking about money is still somewhat taboo in the UK.
Indeed, Klarna found that 32% of adults feel too uncomfortable to discuss their wealth with peers, despite 44% regularly worrying about money.
You shouldn’t struggle in silence, as talking about things can help you process your thoughts and encourage you to develop a firm plan to make you feel more in control.
This should ideally be the first step you take in combatting financial stress. After all, a problem shared is a problem halved, and simply discussing this with your loved ones can lift a considerable weight from your shoulders.
2. Build or contribute more to an emergency fund
Life has a habit of throwing unexpected scenarios your way. No matter how robust your financial situation is, sometimes you simply can’t prepare for everything and finding money to cover an unexpected expense can be stressful. This is especially the case when you’re already feeling anxious about your finances.
So, it may be wise to build, or bolster, your emergency fund. This means keeping some cash in an easy access savings account where you can get your hands on the money without issue if, say, you lose your job, or your car breaks down.
You may want to save between three- and six-months’ worth of necessary expenses to cover any eventuality. Though, if you’re self-employed, or have children, it may be worth saving even more – up to 12-months’ worth if necessary.
Not only will this help you cover any essential bills should the worst happen, but it can give you much-needed peace of mind that you won’t need to turn to loans and other forms of expensive borrowing if an unexpected bill lands.
3. Ensure you’re adequately protected
Protection ensures that your loved ones will remain financially supported should the worst happen, giving you well-deserved peace of mind. If you’re still considering whether protection would ease your financial stress, it can be instructive to think about the risks of not taking it out.
For instance, if you had to take an extended period off work due to an illness or injury, would you have enough income to support yourself and your loved ones? Or, if you were to die prematurely, would your family have enough savings to live on?
When you take on protection, you’re helping to ensure you and your family will still be able to meet any financial obligations and maintain your standard of living after an unforeseen situation.
After all, the risks of not having protection may be significant. Putting the right cover in place can give you the peace of mind of knowing your loved ones’ financial wellbeing is secure.
Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
4. Get on top of your budget
Reviewing your budget is a straightforward way to relieve financial stress. When you know exactly how much money is coming in and going out of your accounts each month, it can lift a weight from your shoulders. You’ll typically be in a better place to make an informed plan about your spending and saving habits.
For instance, you could lay out your short-, medium- and long-term goals now, then work out the changes you need to make to meet them. You may also be able to spot weaknesses in your financial plan and be able to deal with them appropriately.
Doing all this can make you feel more in control of your finances and reduce your stress levels.
5. Work with an expert
Perhaps the best way to clear your head and relieve financial stress is simply by collaborating with an expert.
A survey from Royal London demonstrated how working with a financial adviser can boost your mental wellbeing, as shown by the graphic below.
Source: Royal London
As you can see, clients who worked with a financial adviser felt more financially secure, more in control of their money, and less anxious about their household finances.
When you have someone in your corner helping you deal with typically stressful financial situations, you could start to feel less anxious about money and more financially secure.
Get in touch
If you’re feeling financially stressed, we can help manage your wealth to lift a weight from your shoulders and secure your long-term financial wellbeing.
Please email us at info@investmentsense.co.uk or call 0115 933 8433 to find out more.
