Hosted by the Mental Health Foundation, from 14th to 20th of May, is Mental Health Awareness Week. This year’s theme is a theme we’re all more than familiar with: Stress.
In the UK, 85% of adults experience stress regularly, with the leading cause of stress being money. With over a third of Brits experiencing stress for at least one full day a week, it’s clear the issue of financial worries in Britain need to be addressed and rectified.
With house prices at the highest they’ve ever been in history, only 45% of UK adults contributing to a pension, an increase of 340,000 households since last year with no savings, and the average debt of the UK household (including mortgages) being £58,119 (http://themoneycharity.org.uk/money-statistics), it’s no wonder we’re stressed.
It’s all well and good suggesting exercising more, eating better and getting a good nights sleeps to relieve stress, but it doesn’t help the root cause of the problem when it comes to financial worries.
Many are overwhelmed at the thought of having to track all their spending just so they can stick to rigid budgets. Some don’t even know where they can cut back just to put money towards paying off debt. Finances can be daunting, and even thinking about getting your finances in order is a great cause of stress, let alone actually doing it.
So what should you do if you’re experiencing financial stress?
Get all your finances into an easy to read format, including assets and property
Aggregating your accounts means that you’ll be able to compare all of your wealth quickly and easily, giving you a better idea of where you stand. Having them in an easy to read format means you don’t have to stress about looking at tons of paperwork or just staring blankly at numbers.Go through all your transactions
There may be simple things you’re missing, like subscriptions that you haven’t noticed coming out of your account. Or perhaps you’ll realise that you’re spending money on coffee and sandwiches from your local cafe 3 times a week, money that could be put towards paying off debt or going towards a savings account. Going through your transactions with a fine-tooth comb and setting out how much you spend on eating out, groceries, subscriptions and bills every month means you can work towards seeing where you can cut back. Simply things like switching energy providers, changing phone contracts, switching to a cheaper supermarket or taking a bus or walking rather than getting an uber can save you hundreds a year.Start setting budgets
A difficult thing to stick to, but if you know exactly how much you’re spending then it’s easier to set out and stick to a clear and informed budget. Planning each week or month may take time, but knowing where your money is going to go makes it easier to resist impulse spending.Pay off your debt
Before you start saving, pay off your debt. Debt is a major cause of money related stress and can spiral out of control very easily. There are many resources that can help you identify how to deal with it in the most efficient and affordable way possible. The Money Advice Service have a useful list of free debt services.Start saving
Once you’ve got your debt under control, you can look towards saving. It doesn’t have to be huge amounts and doesn’t have to be a daunting prospect. Having goals in mind, like house deposits, house refurbishments, or holidays help with the idea of saving. There are plenty of long term savings products available, including Lifetime ISAs, Stocks & Shares NISAs, and Tax Exempt Saving Plans. It can also be helpful to start saving into an emergency fund, as you never know when you’ll need it, and having a pot of money for a rainy day can help give you peace of mind.
This blog post is to provide information and ideas, and is in no way intended to act as a financial advice service.
For more information on how Moneyhub can help with steps 1 to 3 try signing up for an account, or send us a message at contact-us@moneyhub.com for questions about how we can help.
Written by Alice Dingle, Content Curator at Moneyhub Enterprise