Financial wellbeing is so important, and after the last year of financial uncertainty both individually and as a country, there’s never been a better time to start looking after your money and your future financial capabilities. It’s easy to brush financial wellbeing under the rug – after all, we’ve already got our mental and physical health to worry about. But improving your financial wellbeing can be done in little steps and, as your financial anxiety eases, you might find your mental and physical health both improve too.
As emotional beings, our surroundings and everyday interactions shape how we view the world and how we view ourselves. When our relationship with something isn’t positive, we tend to assume every interaction with that thing will be negative. This leads to avoidance and general neglect. When that thing is money, it can also lead to bad financial habits, over-indebtedness, or simply bad money management.
We’ve collated a few easy tips to help you improve your financial wellbeing, because it’s important that you have a good relationship with money. Not every step will necessarily apply to your circumstances, and it is possible to get more personal money advice for free if you’re worried about money or debt.
Sustainable Budgeting
If you already live on a low income, then you’re probably sick of people suggesting you budget your finances and even more likely: you probably already do. But is your budget sustainable? Or does it cause stress every month as things don’t add up? Budgeting should be a simple and stress-free task. It’s a preventative measure to help you control your expenditure and how your disposable income is spent. Some months won’t align – unexpected and emergency payments do arise – but a sustainable budget allows for occasional cashflow shortfalls by helping you protect yourself against financial mishaps. The key to sustainable budgeting is putting a little bit of money into savings each month – even if it’s only £10 or £20. It can add up pretty quickly and even if you can’t cover the entire expense with your savings, it will reduce the amount you need to borrow, saving you money in interest overall.
Financial Literacy
Part of improving your financial wellbeing comes from increasing your financial literacy. Financial literacy is your awareness and understanding of financial products and services. It can sound like a daunting term and as adults, we can be reluctant to learn new things. But spending a few minutes every week researching new financial services or even the current products you use will immediately help you in your everyday life. From packaged bank accounts to buy now, pay later schemes: just because you’ve heard of it, you aren’t guaranteed to understand it, and you’re probably even less likely to know how some seemingly helpful financial products can actually worsen your situation in the long run.
Tackle your Finances with a Smile
There is plenty of research to show that a simple smile can improve your mood. So, if you struggle to motivate yourself when it comes to dealing with your finances, or you just hate the task altogether, try starting any admin with a smile. Even a fake smile releases the same hormones as a genuine one, so as the phrase goes: fake it ‘til you make it. You won’t instantly love handling money but starting your money management tasks with a positive attitude will help you to build a good relationship with your finances.
Avoid Buyers’ Regret
This is definitely something that is easier said than done, but invisible spending is an unseen enemy when it comes to making good financial decisions. Most of your income will be allocated into rent, utilities, food, and non-essential expenditure. But for most people, it’s the non-essential purchases that always accumulate unsuspectingly. Tracking your payments can help you tackle invisible spending and cut down on the purchases you don’t realise you make throughout the month. Additionally, waiting 30 days before making a purchase usually diffuses the impulsiveness you might feel when shopping (both in-store and online). It may seem silly, but it’s better to wait a little while for something, than to get it and regret it. And, if you do find you suffer with buyers’ regret, try to return the item as soon as possible to minimise the financial aftereffect. There is no shame in returning things simply because you changed your mind.
Get talking about money
One of the best ways to improve our mental health is to surround ourselves with a good support network. There’s a similar theory for financial wellbeing: if you feel confident and supported in your financial decisions, you’ll likely feel better about having to deal with money in general. As private individuals, we tend not to discuss personal matters like money, but having small and open conversations with people we trust can not only help us understand any mistakes we may have made in the past, but also build our confidence in our ability to control money and financial matters in the future.
As well as building your own financial wellbeing, it’s important to instil good money management in your children and family. Talking to your kids about money can be tricky, but children learn quickly and often echo their parents’ feelings – whether it’s not liking fish, being a nervous driver or poor money habits. If you have a positive attitude towards your finances, they will too.
Your financial wellbeing won’t change overnight, but it will quickly improve if you make little, conscious efforts to deal with your finances in a positive light and actively try to control your money, rather than letting your money control you.
