If you’ve found yourself worrying more about money matters of late, it might help you to know that you’re not alone.
- More than half of UK adults are experiencing anxiety or worry as a direct result of the cost of living rising. That’s according to November 2022 research by the Personal Finance Society.
- It’s one of the contributing factors why more than one in four of us (29%) say our mental health got worse over the course of 2022. This is based on November 2022 findings by Rethink Mental Illness.
- It’s so important to look after your own financial wellbeing, especially if you’ve noticed any impact on your behaviour. For example, if you find yourself more withdrawn than usual around other people.
Anxiety, or worry, is something everyone experiences from time-to-time . It can actually be a useful emotion in preparing you for things, like public speaking. It can also protect us from danger. But too much of it could impact our health.
When it comes to certain topics, such as money matters, your worries can often centre on future unknowns. And potential scenarios that might never even come to pass. This can send your mind wandering in unhelpful ways for your wellbeing.
There’s a Swedish proverb that goes “worry often gives a small thing a big shadow.” That’s not to say any money-related concerns you have right now are small. But sometimes the worried thoughts that run through your mind can cast a bigger shadow than is merited.
Budget your finances
As we say, it’s the unknowns that can really fuel anxious thoughts. And a way to reduce that uncertainty is to get closer to your finances by closely tracking your spending.
All you need are some bank statements, ideally at least three months’ worth. Go through and track your regular bills, and then try to work out how much you’re typically spending on other areas like your food shop and filling up the car.
With a full overview of your spending patterns, you can see where your money is going, what your capacity might be to absorb higher bills (caused by the cost of living crisis) and how much money you can still spend on treats like eating out. That way, you can enjoy yourself with less guilt.
Check if you could save money by switching suppliers
If you’ve been loyal to certain providers for products and services, it might be worth checking if better deals are available elsewhere. There are several useful search comparison sites available that could help.
Equally, if you go through your finances to set up a budget, you might find you can make some small useful cost savings here and there. For example, you may have a direct debit to insure a computer that you don’t even use anymore. Or a membership to a gym that you’ve long since stopped going to. Just make sure you check the terms before cancelling them.
Check if you’re getting a good return on your savings
There’s a lot of attention devoted to the impact of interest rate rises on homeowners, but the other side of the coin is that many savings rates have gone up too.
After more than a decade of historically low interest rates, there’s some more favourable interest rates on offer for your savings. So if you’ve not checked the rate they’re currently getting, it’s worth having a look. (And of course, saving is something we can help you with.)
That said, at the end of 2022, the rate of inflation was still significantly higher than rates offered on savings accounts. So over the long-term, it remains difficult to grow your money in real terms. Still, for your short-term needs, and for money stored for just-in-case moments, you might be able to earn more savings interest.
See if you could be more tax-efficient
The November 2022 fiscal statement from the government made lots of headlines for tax rises. But it did have some bits of good news tucked away. Tax-efficient incentives like pensions tax relief and annual ISA Allowances still remain in place.
If you’ve not made full use of your tax-efficient allowances, it’s definitely worth considering them when it comes to your long-term plans. They could help you keep more of your wealth. This is something we might be able to help you with.
Be mindful of your news intake
It’s never been easier to keep abreast with the news, from 24 hour news channels to apps on our phone. This greater connection to the world can be really valuable, but also cause you to develop something called news anxiety. This means following the news so closely that your mental health starts to suffer because of how worried it makes you.
It’s typical to see more bad news in the media about personal finances than good news. For example, over the past year you may have read and watched a lot of stories about stock markets going down (and little about the times when they have gone up). Without even realising, it could be having a negative impact on your wellbeing.
Experts recommend managing the amount of news you consume. Maybe stick to watching just one news bulletin a day. And change the settings on your phone to reduce your news alerts. Set aside time for taking in current events, including financial news, then focus on what matters in your life.