Financial Wellbeing: Managing Money Worries with Our Guidance
Money opens doors and creates opportunities, but it can also be a source of worry, stress, and conflict. The connections between money and general wellbeing are well-established. Having enough money allows you to make healthier choices around food, exercise, and living conditions. Conversely, poor physical or mental health can increase pressure on household finances, and worrying about money can make the situation worse.
In this guide, we look at some common financial concerns and suggest ways to address them, with a focus on how we can help you manage these worries effectively.
Financial Worries
- Worrying about money is normal. Some common concerns include:
- Do I have enough money to pay the bills and save for the future?
- My spending habits are causing problems with my finances and relationships.
- I’m worried about debt.
- What will happen if I face a financial emergency?
- What happens if I become seriously ill or pass away?
- I don’t understand my finances and avoid looking at statements.
- I worry I won’t have enough money to retire on.
- How can I give my children the best start in life?
Rather than getting overwhelmed, it’s a good idea to focus on one area at a time and control what you can. We are here to support you in this process.
Financial Literacy
Financial literacy is crucial for managing your money effectively. In the UK, many adults need urgent help managing their finances, and improvements are being made by introducing financial education in schools. However, there's still a long way to go.
To improve your understanding of financial matters, consider the following free resources:
MoneyHelper
Money Saving Expert
The Money Charity
FT Financial Literacy and Inclusion Campaign
Additionally, consulting with us can provide personalised guidance. Understanding your finances and putting a plan together can instantly alleviate some of the pressure.
What Do You Want to Achieve?
Once you understand the basics of financial planning, it’s essential to set some goals. While major life goals like retirement or buying a property are important, starting with smaller goals, such as paying off a debt or saving for an important purchase, can build your confidence.
Achieving these smaller goals can encourage you to pursue bigger dreams. We are here to help you set and reach these goals with tailored financial planning.
Budgeting
Knowing what you want to achieve starts with understanding your budget—how much you have coming in every month and how much you are spending.
If you earn more than you spend, this is a great starting point. You can begin to put your surplus money to work. Depending on your goals, you might even want to adjust your budget to achieve them more quickly.
If you are spending more than you earn, this is unsustainable. You will need to make some changes to your lifestyle or look at ways to earn more money.
If you are struggling with debt, take action now. A debt charity such as StepChange can offer free, impartial guidance and practical help.
Sticking to a budget and taking control of debt can help to reduce stress and worry. We can assist you in creating and maintaining a budget that works for you.
Dealing with Emergencies
An unexpected bill, urgent repair, or a short period out of work can quickly undo all your hard work. Relying on credit for these situations can lead to spiralling debt and increasing anxiety.
Building an emergency fund of around six months’ worth of fixed expenditure is a good idea. This means that if you face an unforeseen expense, you can handle it without undue stress. We can help you plan and build this essential safety net.
Financial Protection
Illness and bereavement can have a devastating impact on a family. In a worst-case scenario, the last thing you want to worry about is money.
Consider the following types of protection:
- Life cover to provide a lump sum on death, which can be used to clear your mortgage and/or provide financial support to your family.
- Critical illness cover to provide a lump sum if you are diagnosed with a serious medical condition.
- Income protection to replace your earnings if you are unable to work for health reasons.
Financial protection can’t cover every risk, but it can give you peace of mind that your family is provided for even in the most difficult situations. We can guide you through selecting the right protection for your needs.
Saving and Investing
If you are working towards any short, medium, or long-term goals, understanding the basics of saving and investing is essential.
As well as your emergency fund, keep any short-term savings in cash for expenses like holidays, gifts, or home improvements.
Investments should only be considered if you are looking at a minimum timeframe of five years, ideally longer. This is because the market fluctuates daily, and a short timescale means you are more likely to lose money.
Considerations include:
- Investing tax-efficiently, for example through pensions and ISAs.
- Investing in a diverse range of assets at an appropriate level of risk.
- Keeping costs under control and avoiding gimmicky, overpriced investments.
- Avoiding scams and proceeding carefully with investment trends.
- Keeping track of your investments to ensure you are still on target to achieve your goals. Participating in Annual Reviews with us will help and support you to keep on top of any and all finances.
The investment and pension universes are vast and can be overwhelming if you are just getting started. We can help simplify this process and provide tailored advice to meet your investment needs.
Helping the Next Generation
Giving children the best start in life is an important goal for many people. This might involve making sure they are financially supported, for example by saving into a Junior ISA. Families with significant wealth may also want to consider trust and estate planning—this is a complex area where we can offer advice.
One of the most important gifts you can give your children is the tools to manage their own finances. Financial literacy is crucial, and we can help you teach your children to build a healthy relationship with money and improve their financial wellbeing.
Contact Us
Please don’t hesitate to contact us to find out more about how we can assist you with your financial planning needs. We are here to support you every step of the way.
