7 important tips to help you deal with finance-related stress

Category: News & United Kingdom

April is Stress Awareness Month in the UK.

Every year since 1992, mental health charities have looked to raise public awareness of the causes of stress and promote some of the solutions for the many people who suffer from this debilitating condition.

There are many different triggers for stress and anxiety, such as your work environment and personal relationships.

One of the most common is financial and money concerns.

So, discover some simple tips about how to avoid stress when it comes to managing your money.

1. It’s important to understand the causes of your stress

Accepting that you’re financially stressed is the first step towards dealing with it.

Staying in denial and thinking you’ll just be able to muddle through is likely to make the problem worse and accentuate your anxiety.

It’s important to understand that anyone, regardless of wealth or income, can experience financial stress.

Obviously, the most common occurrence is households with incomes not making enough money to meet day-to-day commitments such as paying the bills and food shopping.

However, it’s also easy for someone who is relatively well off to get into a stressful position that appears difficult to get out of.

Some of the common causes of financial stress are:

  • Excessive borrowing to support your lifestyle
  • A high-pressure work environment
  • Continually spending more money than you earn.

So, the first big step to dealing with your stress is accepting that you are suffering. Once you’ve done that, you can then start taking steps to deal with it.

2. Get yourself organised

A feeling of not being in control is a common symptom of stress, and this can easily relate to your financial position.

If your outgoings exceed your income each month and you’re having to resort to expensive borrowing to bridge the gap, it’s easy for that process to become a cycle that simply reinforces itself.

By getting your financial management in order, you’ll be able to clearly see the extent of your problems.

A simple income and expenditure spreadsheet listing your outgoings – both regular and discretionary – is a good place to start.

It should help you see exactly where your money is going and identify any clear pressure points, such as spending too much money on luxuries and eating out.

3. Make financial automation your friend

A lot of stress can come from juggling different thoughts in your head, especially at night when it can easily affect your sleep and wellbeing.

One solution that can start to address this problem is to look to automate as much of your financial management as possible.

At a simple and practical level, this means making sure you have mandates set up to pay all your regular outgoings.

To help manage your budget, think about setting up an automatic transfer of money each month to a second account that you use for discretionary spending, so your main account is used only for regular commitments.

Then use a simple diary or money management app to help you with budgeting. You can also use it to set reminders for yourself, such as when bills are due or insurance renewals are scheduled.

The more that happens without you having to worry about it, the more in control of your finances you’ll feel.

4. Getting your debts under control should be a top priority

As you’ve already read, debt is a common cause of stress. If it’s mounting up, now is the time to grasp the nettle and start reducing the amount you owe.

Just confronting the problem and putting a plan in place to sort it out will give you a mental boost.

List your debts and the interest rate you’re being charged on each. Then target them one by one, starting with the debt with the highest interest rate.

Bear in mind that the interest on unsecured debt will likely be higher than the rate you’ll be getting from a savings account.

So, with the exception of any emergency fund you may have, it can make sound financial sense to use your savings to help clear your debt.

Once you’ve cleared one source of debt, then go on to the next until you have cleared them all.

5. Keep focused on your goals

Setting yourself targets and goals can help reduce your stress levels. They will give you a clear sense of purpose, so think ahead to where you want to get to.

With realistic targets in place, you can then put together plans to make sure you achieve your goals.

You may need different strategies and timescales for different goals. For example, saving for your retirement is likely to be a long-term endeavour, while building a fund to cover the cost of your children’s school fees will be tackled over a shorter period.

Reviewing your goals regularly and seeing that you’re on track will keep your confidence levels high. Furthermore, you’ll gain a valuable sense of self-worth and achievement when you can tick them off.

6. A financial problem shared is often a problem halved

If you’re married or in a partnership, it can help to share any financial concerns you have that are causing you to become stressed.

Keeping things bottled up can simply create more problems, especially if your concerns are around household spending and budgeting.

After all, from a practical point of view, there’s little point in you taking steps to reduce your shared debt if your spouse or partner isn’t aware of the situation and carries on spending.

By sharing your financial concerns, you can then work together to come up with potential solutions.

7. Don’t neglect your health

if you’re unduly stressed about your finances, one common outcome is that you start to neglect your health.

Maintaining a healthy lifestyle will improve your mood and sense of wellbeing and make it easier to deal with any financial issues you may face.

Exercising each day in a way that works for you can really help lift your mood as well as improve your health. Even something as simple as a regular walk is a great way to clear your head of conflicting thoughts and put you in a positive frame of mind.

Likewise, you can also improve your health through your diet. Avoiding junk food and eating more healthily will also give you a mental lift.

Get in touch

If you have concerns about your financial position, please get in touch with us.

Please note

The value of your investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

This article is for information only. Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances. All contents are based on our understanding of HMRC legislation, which is subject to change.