The importance of physical and mental wellbeing has been talked about for quite a while. We all know by now that these are both important ingredients to a happy life. You might already be looking after your health by exercising or eating healthily. But what about your financial wellbeing? Is it being looked after?
According to various research studies, mental health and money problems are often intricately linked. A survey by Money and Mental Health revealed that 86% of people who experience mental health problems said that their financial situation had made their mental health problems worse. Another study suggests that 48% of UK adults regularly worry about money.
It’s always a good time to reflect on your own money wellness and how it might affect your general wellbeing. I’ve put together five simple financial wellness tips I’m urging you to start practising today (if you haven’t already!).
How to reduce stress and worry caused by money
Your finances should be looked after the same way you look after yourself. We buy healthy food that nourishes our bodies, exercise to maintain our fitness level, and take care of our mental health by doing things that matter to us as well as spending time with our loved ones. So why not take care of our finances in the same way?
Money is an integral part of our lives. Therefore, money worries affect various aspects of our lives, such as the life satisfaction we experience.
In 2019, PwC conducted a study on the financial wellbeing of consumers working in the US. It found that personal finances are the biggest stressor of all – even greater than any other stressor combined. Financial stress was mainly caused by respondents’ income, debt and difficulties in saving money. Even small unexpected expenses caused considerable stress.
Do you feel that you identify with the respondents’ concerns?
Financial wellness is not about thinking about money all the time
The stress associated with money matters can subconsciously linger in the back of your mind. Little by little, it can begin to affect our behaviour, relationships and wellbeing. You may find that you think about money more often than you would like and it makes you feel uneasy. So how should we tackle such feelings?
Your financial situation may be good, but you may still experience uncertainty about your own finances. Perhaps the reason for these feelings lies in the fact that you don’t recognise your own money skills; what are you good at and what could you perhaps still improve?
Financial wellbeing begins with a feeling of being in control of your own finances and recognising how you can improve them to get towards your dreams. Hence, identifying your own situation and money personality type is an important part of the journey to financial wellbeing!
Now let’s look at some financial wellness tips that can help you to transform your money situation.
5 tips for financial wellness
1. Form healthy money habits
Saving or investing gets much easier when you manage to get a habit of it. At first, it’s worth focusing only on creating a habit and not stressing too much about the amount to be put into savings, for example. You can start saving even with £10 a month! The Japanese kakeibo budgeting method can be a great way to get started with a saving habit.
In addition to making a conscious effort to form new saving habits, apps that round up change can also be an effortless way to help you save. These apps round up any spare change and save it automatically every time you spend.
2. Have a friend or a family member to support
Similar to going to the gym, pursuing financial wellbeing with a friend can boost motivation and make it easier for a new routine to become a habit.
Hitting financial goals, such as saving or paying off debt requires patience, so social interaction can also reduce the stress associated with spending money. You’re not being left out or pressured to spend money when your friend or partner is also committed to saving.
Related: How to navigate finances as a couple
3. Monitor your progress and reward yourself
Another good financial wellness tip is to track your progress. This is a great way to maintain a positive mindset and feel motivated. This will help you to see how far you have already come. It will also help you to focus on positive things instead of thinking about how much you have left for your final goal. Enjoy small successes on your journey to financial wellbeing and remember to celebrate them. Be proud of your progress!
4. Develop money skills
Financial wellbeing is a rising trend that is being talked about more and more. Although schools are still lacking sufficient education on personal finance, the internet and social media are full of resources for personal finance education nowadays. In addition to this, you can consider if you would be willing to pay for personal finance skills coaching and what approach would be right for you to learn. It’s easy to get a personal trainer and train your psychical fitness, but have you thought that you could train your finances in the same way?
5. Make your money work for you
If you have spare money left after fixed costs every month, it might be time to start making your money work for you by investing. Despite the common belief, I don’t need much money to start investing. From providing financial security to helping you to reach your dream life, investing has various benefits and can be much easier to get started than you’d expect. If you are a beginner, start by researching passive index funds and ETFs.