Struggling to keep on top of your finances? Worried that you’re not saving enough? Financial writer Amy Bonifas asks the experts for seven easy ways to stress less about money.
A poll by Statista found that managing our money is the main cause of stress in Britain. Many of us are feeling overwhelmed by huge mortgage rates, the costs of having a family and saving for other future milestones. It’s no surprise that one in five of us are suffering mental health problems such as depression and anxiety as a result.
We ask the experts for seven ways you can feel less helpless and more hopeful when it comes to your finances.
1. Regularly check your balance
“Often, anxiety about finances comes from ignoring them,” says Louise Cartwright, a success and money coach. “So, set aside time each week to check in with your money. Even if the state of your balance is worse than you thought, at least you know and can make informed decisions about what to do next.”
2. Come to terms with your spending
“Create a simple income and expenditure spreadsheet, and spend the month monitoring your spending to see where most of your money is going,” suggests Cartwright. The Money Saving Expert’s budgeting planner is a good place to start.
“It’s also a way for you to spot any rogue costs or fees. Having this clarity will help you determine how much you can realistically afford to save each month. Plotting out your monthly expenses can illustrate where potential spending cuts could be made. If you own a car, maybe look at if your car insurance costs could be reduced. Consequentially, a site like Money Expert could be helpful.
3. Set realistic savings goals
Even if you’re only able to save a tiny amount each month, it all adds up. “Rather than leaving it ‘til the end of the month, I’d suggest setting up a Direct Debit so that the money leaves your account almost before you know it,” proposes financial journalist, Harriet Meyer. “Try not to think about it for a few months and over time, you’ll be surprised by how much you build up. The sense of achievement will beat the feeling of guilt when you’ve overspent.”
4. Talk about it
“Keeping secrets about money just adds to the stress,” Cartwright believes. “If you’re in a relationship, creating a shared interest in money means you can be open with each other about the good and the bad.
“Start by seeing how your financial goals tie in your with your joint life goals – whether it’s buying a house, getting married, travelling or starting a business. Open up conversations from a place of non-judgement – ‘I feel that perhaps our spending has got a little out of control, would you sit down with me and take a look?’”
If you want to talk to someone impartial, book a free session with a financial advisor who can start to talk to you about how to stress less about money by making the most of it.
5. Cool-off before spending
Tend to buy now, worry later? “It sounds obvious, but before buying things, ask yourself whether you really need it,” recommends Meyer. “With online shopping and one-click buying, most of us don’t stop to take a moment before we spend. It’s fine to treat yourself every once in a while, but try to take a breath before buying so you can avoid purely impulse buys.” Disable one-click shopping and websites saving your delivery and payment details to help you be more mindful.
6. Prioritise your debts
A lot of us have long-term student loan and mortgage debts that we gradually pay off. However, when it comes to personal loan or credit card debt, avoidance only makes things worse. “List your debts and break it down into more manageable chunks by prioritising the one with the highest interest rate first,” advises Meyer. “I’d recommend tackling outstanding funds before saving, as you could end up paying more for your debt than you’re earning on your savings and end up losing money.”
7. Get excited about saving
There are so many easy tools you can use to make being frugal more fun. “Use cashback websites such as QuidCo and TopCashBack when you’re buying large ticket items such as a TV and this can build up almost into a mini savings pot,” says Meyer. “You can use comparison sites for everything from food shopping to your holiday to make streamlining your spending more of a challenge than a chore.”
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“I always encourage people to find the joy in saving money,” adds Cartwright. “Give the money a purpose, get excited about what you’ll achieve as a result and you’re more likely to stay on track.”