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Savings and lifestyle Financial planning
5 June 2023
Author: Punter Southall Aspire

Achieving financial wellness: our top 8 tips

Many factors can influence our mental health. Genetics, brain chemistry and physical health can all play their part. Yet money also has a big impact on our sense of wellbeing. 

The mental health charity Mind points out that mental health can affect how people deal with finances. Also, money problems can create and compound mental health problems.

One-third of UK adults report that they feel anxiety about how to pay their bills in the next two weeks. 37% of people say they are too ashamed to talk about their money problems. 

Mental health problems related to money can affect anyone, regardless of wealth. In this article, our Financial Planners offer 8 tips to help people achieve better financial wellness.

#1 Talk to someone

Problems often appear bigger than they really are when we try to deal with them ourselves, in our heads. Fortunately, there are lots of places to turn to if you have money stresses. 

Mind’s helplines could be an option. For those with a financial adviser, you could discuss your concerns with them to make your financial plan more robust. Citizens Advice is another option. 

You could talk to a trusted friend or family member. However, factors such as comfort, practical assistance and emotional impact will be important when deciding whether this is a good idea. Turning to professional help first may be a better way to get impartial advice. 


#2 Make a budget decision now

Sometimes we all just need a “quick win” to give us more confidence with our finances. 

For instance, if your spending feels out of control, take 10 minutes to go over your recent bank statements (e.g. on your mobile phone). Can you see any useless expenses that could be cut straight away - such as a digital streaming service or gym membership? 

Doing this could instantly save £20 a month or even more. Over a year, that’s £240 in potential savings that you have achieved with 10 minutes of effort. 


#3 Schedule a spending review

Creating a budget is always a good idea. Yet how easy is it to forget it and let good habits slide? 

Consider putting a reminder in your phone calendar every month, or two, to take 10 minutes in a quiet moment to go over your recent spending in light of the budget you crafted. 

Try to schedule for a time when you are confident that you will not be interrupted, such as on the train/bus going home from work. Make note of two or three spending habits that you could improve (rather than listing every problem) and check these on your next review. 

Over time, this will help you refine your spending habits and grow your financial discipline. This creates a greater feeling that you are controlling your money - not the other way around. 


#4 Pay off some smaller debts

If you have a range of personal loans or debts which you are dealing with simultaneously, it might seem intuitive to focus on paying off the bigger ones first. 

However, it is often better to try and prioritise the smaller ones - especially if they have higher interest rates. The key factor here is motivation. Over time, some people may get discouraged by how long it takes to get rid of a bigger debt. 

If this describes you, then paying off smaller debts could help you build motivation and encouragement. Speak with a professional if you are unsure what to focus on first. 


#5 Write a will

It may not take long to write a legally airtight will (if your estate is not too complex). Depending on the circumstances, you could do it online within 40 minutes and perhaps even for free. 

Having a will in place helps to give your peace of mind that your loved ones will be looked after if you die prematurely. It also secures your wishes regarding possessions and money (who gets what and when) - not leaving you subject to the UK’s unreliable intestacy rules. 


#6 Start saving

If you feel like you are living pay slip to pay slipcheque, this can be very unsettling. What happens if you suddenly lose your job or a big, unexpected bill arrives? 

Another benefit of reviewing your budget is that you could identify areas where you could save more. Even putting aside £50 per month could be a big confidence boost and help you build up some reserves for life’s unexpected events. 

A good rule of thumb is to try toand build 3-6 months’ worth of living costs in easy-access savings. After that, you can focus more on longer-term saving and investing. 


#7 Strengthen your protection

Many mental health struggles come from anxious thoughts about “what if?” For instance, what if I get seriously injured and could no longer work for a season - how would our household cope? 

Building a financial protection plan is hugely valuable for strengthening your financial security and peace of mind. Critical illness cover, for example, could provide a much-needed lump sum if you suffer from a heart attack, stroke or other condition. 

Income protection could provide a replacement, tax-free income for a time if you get sick and cannot work. This would go much further than relying on Statutory Sick Pay, which in 2023-24 stands at a mere £109.40 per week for up to 28 weeks. 

A financial adviser can help you survey different financial protection options and decide on the best one(s) in light of your goals and circumstances. 


#8 Build your retirement fund

How secure do you feel in your long-term financial future?  

As many as 29% of those aged between 35 and 54 believe that their pension savings will not be enough to live off in retirement. This is bound to be a big source of stress for many people. 

Having a robust retirement plan can give you a much better sense of peace about your future retirement. Essentially, this involves asking yourself “How much do I need?” and “How much do I need to contribute to achieve that”? 

Working with a financial adviser can bring the best answers to these questions and craft a plan to move you more productively in the right direction. 

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At Punter Southall, we have a team of highly skilled risk, compliance and legal experts with deep in-house practical experience. Get in tough if you would like a friendly chat with one of us.