14 June 2021

By Rosemary Bigmore

Money worries are one of the most pressing issues for many British families, and the uncertainty caused by the Covid-19 pandemic has only exacerbated the issue.

Studies show that some people are more concerned about money than their physical health; and almost 40 per cent of us are concerned that money worries are impacting on the mental health of one of our loved ones.¹

Two in five of us say we are worried about our financial future, with one in five saying financial worries are so great that they keep them up at night.

Some of our biggest money worries include losing our jobs, not having savings for unexpected expenses and not having money for retirement.

But there are ways we can get on top of our financial worries – here are some of the most useful.

  1. Understand your spending patterns
    Knowing what you spend – and when – can help you to stay on top of spending, and budget for those stressful unexpected expenses. Apps like Money Dashboard and Emma analyse your spending and show you where your money is going. Your own mobile phone banking app may also be able to help with this. Looking at what you spend can help to identify ways to save money, such as cutting subscriptions that you no longer use.
  2. Protect your family
    Worrying about the future is a horrible feeling, so it’s important to know your family would be protected financially if one of you is unable to work or dies. Insurance policies that pay out in these situations are called ‘protection’, and a financial expert will be able to talk to you about your protection needs. It can be comforting to know that there would be an income for you or your spouse and your children if the worst was to happen.
  3. Make a ‘money worries appointment’
    Worrying constantly about money is wearing, so set a time when you plan to go over documents and make realistic steps towards your money goals. Ensure you have passwords and paperwork ready in advance and make a plan of what you need to tackle. Once you’ve done it, stop thinking about money as much as possible until the next appointment, rather than letting it invade the rest of your thoughts.
  4. Create an emergency fund
    Unexpected expenses such as your car breaking down or a new boiler can throw your financial plans off course. Over the long term, redundancy could further stress your finances. To stop bad luck derailing your budgeting, try to put together a fund for emergencies. Carla Morris, financial planner at Brewin Dolphin, says you should have enough cash set aside for six months of expenditure.

    “This money could provide peace of mind if you suffer a salary cut or a drop in dividend income, but you still need to meet your essential outgoings,” she says.

    You can do this by setting up a direct debit on payday so that you pay the emergency fund first before spending money on other things. Or you can use an app like Plum, which analyses your spending and outgoings and siphons off money you don’t need in your current account. Before you know it you will be feeling more financially resilient, with a large savings cushion behind you.
  5. Exercise outside regularly
    Money worries, like other worries, seem worse when you’re stuck at home. Getting out into the fresh air and exercising can improve your mental health and stop you worrying about cash flow. 
  6. Talk about money
    Airing your concerns about your finances will improve your wellbeing. Speaking to a trained professional, such as a wealth manager, is likely to be even more effective than talking to a friend, as they will be able to help you to make plans to improve your finances and put together realistic goals for your future.

Source: The Telegraph