Feeling the stress of managing your money? Here’s what you could do

With so much to think about when managing your money, it’s understandable that you might sometimes feel stressed when doing so.

However, while some stress is inevitable, research shows that this pressure puts a great deal of strain on people.

According to the Mental Health Foundation, 1 in 10 UK adults feel hopeless about financial circumstances. Furthermore, around 1 in 3 said they felt anxious and 3 in 10 said they felt stressed about money in the last month alone.

Stress can also lead to more mental health issues. Figures from the Money and Mental Health Policy Institute show that 86% of people with problem debt said their financial situation had made their mental health problems worse.

In turn, this can have a tangible impact on how you manage your money, too. For example, the institute also found that 72% of people who experience mental health problems said these issues had made their financial situation worse.

Considering how widespread financial stress is, it’s clearly important to find strategies that reduce these feelings. That way, you can manage your money effectively and live happier.

So, read on to find out some practical steps that can help you reduce financial stress.

Careful budgeting can help you feel more confident about your money

Budgeting is a simple yet highly effective way to take control of your wealth, and can make a real difference to your wellbeing.

By creating a budget, you can build an overview of your financial situation. From there, you might feel reassured that you’re comfortable, or identify areas where you could make changes.

To do so, start by adding together all your income, whether that comes from employed work, a business, or even pensions and other investments.

Then, you’ll need to add up all your expenditures. This includes:

  • Mortgage or rent payments and other necessary bills
  • Discretionary spending, such as on days out or meals in restaurants
  • Money you put towards savings, investments, and additional pension contributions
  • Other regular payments, perhaps on repaying debts or for smaller expenditures such as a gym membership.

From this exercise alone, you’ll be able to see exactly where your wealth goes each month. Furthermore, by subtracting your expenditure from your income, you’ll be able to see whether your lifestyle is truly sustainable.

With this information to hand, you may feel more confident and comfortable that you’re handling your wealth sensibly.

Alternatively, it might present you with an opportunity to reorganise your spending so that you can be certain you’ll be able to meet your financial obligations for the long term.

As part of budgeting, it can also be prudent to make sure you have an emergency fund of cash set aside to cover large, one-off expenses. For example, if you had to pay for unpredicted house repairs, an emergency fund could ensure that you are able to meet these costs without disrupting your other savings targets.

Even if you never need to use it, you may be reassured just knowing that you have an emergency fund to hand.

Knowing you have financial protection can offer immense peace of mind

Similarly to having an emergency fund, another way to achieve some peace of mind is to have financial protection in place.

Financial protection refers to the cover you can buy to safeguard you and your family against a financial emergency.

Think about what might happen if you were unable to work due to injury or illness. Would you be able to afford your lifestyle in this instance?

Or, even worse, what could happen to your family if you were to die unexpectedly? Without your income, would they be able to remain in your home?

If one of these events were to befall you, having a safety net from protection such as income protection, critical illness cover, or life insurance could be invaluable. A payout from one of these types of cover could make all the difference in protecting your family.

Knowing that you or your loved ones would be protected can remove a significant amount of stress from your shoulders.

If you take out any protection that you didn’t previously have, make sure you add the monthly premiums from this to the expenditure column on your budget.

Setting financial goals can give you a target to work towards

Ultimately, your money is useful for one main purpose: allowing you to afford the lifestyle you want, now and in the future.

As a result, you can gain significant confidence that your wealth is suitable for your needs by setting financial goals to work towards, and then organising your wealth around them.

These goals could be anything, and will be entirely personal to you. It might be a directly numerical target, such as having a certain income in retirement.

Or, it might revolve around activities you want to do in later life. Whether that’s going on a world cruise, buying your dream home, or setting up your family for their own financial future, you may have specific ambitions that you want to use your wealth for.

No matter what they are, setting goals like these can offer you a focus for how you structure your money, and the decisions you make.

You may be able to considerably reduce financial stress by knowing that you’re on track to achieve your targets.

Working with a financial professional can put you in control

One of the most effective ways to banish financial stress is by working with a financial planner. As an experienced professional, a financial planner can assess your entire situation and show you exactly where your money goes each month.

A financial planner will always start with your goals, too. They can help you to organise your wealth around what you’d most like to achieve with it, giving you the peace of mind that you’ll be able to reach your targets.

If you’d like to gain control over your money and eliminate financial stress, we can help at Britannic Place.

Email info@britannicplace.co.uk or call 01905 419890 to find out what we can do for you.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions.

The value of your investment 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.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

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If you have any questions or queries, a member of the team will always be able to help. Feel free to use the form below or contact us via phone or email.