April is recognised as Stress Awareness Month in the UK, which aims to raise awareness of both the causes and potential cures for the modern-day stress epidemic.
Financial stress can be experienced by people from all walks of life, regardless of their age or circumstances. Indeed, research by the Mental Health Foundation has revealed that almost 3 in 10 UK adults reported feeling stressed about their financial situation back in 2022 – and it seems not much has changed to ease our stressors in 2024.
What’s more, constantly worrying about money could take a toll on your health and wellbeing, making it hard to enjoy life to the full.
So, if you’re feeling overwhelmed by financial concerns, keep reading to discover four ways to reduce your financial anxiety in the age of overwhelming information and the cost of living crisis.
1. Create a detailed monthly budget
Knowing where your money is going, and ensuring you aren’t spending unnecessarily on things you don’t need, might help to alleviate feelings of financial anxiety.
Indeed, having an up-to-date budget that you review regularly may be a powerful tool for taking control of your finances.
You could start by writing down your:
- Net income – The amount of money you take home each month after taxes.
- Expenses – All essential costs you must cover each month, such as your mortgage and food bills.
- Debt – Such as credit card payments and any other loans that require a monthly payment.
Once you have a clear overview of your monthly income and outgoings, you might be able to identify opportunities to cut back on spending or save more.
2. Take a long-term view of your investments
If you’re feeling anxious about your finances, you might find yourself responding emotionally to a sudden fall in the value of your investments.
However, it’s important to remember that short-term fluctuations are normal and may not affect your long-term financial stability.
For example, if you invest, you’ll know that a degree of market volatility is inevitable. Moreover, building a diversified investment portfolio that contains different asset classes from various geographical areas could help minimise the effect of volatility on your invested wealth.
So, while you might see some of your investments reduce in value in the short term, over a period of decades your losses are likely to be offset by your gains.
This is why creating a long-term financial plan can be so valuable. Having clear and meaningful goals to focus on could help you feel less stressed by short-term changes in your financial situation.
3. Identify your financial vulnerabilities and take steps to protect them
If you spend time worrying about “what if?” questions, it may help to take steps towards protecting your wealth from unexpected events.
Some common sources of anxiety include:
- How long your emergency fund would last if you were unable to work
- If you would have to make big lifestyle changes when faced with a life-altering illness
- Whether your family could continue to afford their lifestyle if you passed away.
If you worry about passing away and leaving your family financially vulnerable, you could consider life insurance, which may provide a safety net in this situation.
Or, if you’re concerned about illness, you may wish to explore critical illness and income protection cover options for yourself and your family.
A financial planner can help you protect what matters most to you and your family, reducing your financial stress when faced with uncertain circumstances.
4. Ask a professional to review your finances
With so many financial decisions to make in life, from setting a budget to protecting your wealth from the unknown, it might be hard not to feel anxious at times.
Plus, in today’s world, there’s no shortage of online financial information and social media influencers offering “advice”. However, this could be misleading and it may skew your understanding of money management and wealth issues.
So, you may benefit from consulting a financial planner who can provide you with the information, expertise, and guidance you need to make data-driven decisions.
Indeed, research by Royal London has shown that working with a financial professional regularly could improve mental wellbeing and reduce financial anxiety. If you worry about money more than you’d like to, we are here to support you.
You can read more about improving your financial wellbeing in our helpful guide.
Get in touch
Whether you’d like to create a long-term financial plan, build a diversified investment portfolio, or review your financial protection, please get in touch.
Email us at [email protected], or call 01273 076 587.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investments (and any income from them) 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.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Note that life insurance 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. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
