Managing money worries

At one time or another we will all worry about money, and in recent times things like inflation levels, the rising cost of living and higher mortgage and rent costs have presented us all with more challenges when managing our money. Financial anxiety not only impacts our financial health, but if left unchecked it can affect our mental wellbeing too.

So it’s vital to pay attention to financial anxiety and to explore ways to reduce and manage it.

If you are feeling anxious about money at the moment, it’s important to know that you are not alone; the Mental Health Foundation’s research (November 2022) found 34% of adults in the UK feel anxious about money with 61% being worried about paying household bills. Feeling low or anxious is a normal response if you are worried about money.

The most important thing is to not struggle alone – there’s help available and there’s always something that can be done to take your finances to a better place and reduce money worries.
With money, as with other aspects of our lives, there are some things that we can do, and there are others that are outside of our control. The plan with money is to do what we can on the things we can control, and to put measures in place to make us more resilient to weather the ups and downs of things that are outside of our control.

So what can employers do to help their people navigate through the uncertainty and feel confident about their finances during this difficult time?

 

1. Have you done all you can within your own budget to reduce regular payments, including getting the best deals possible on things like your energy, phone, subscription services, insurance etc?

2. Have you reduced or stopped all unnecessary spending – even if only for a short time to bring your finances back to where you feel more in control?

3. Have you set yourself a budget and are you monitoring it regularly to keep spending and saving within the limits you can maintain?

4. Where relevant, are you accessing the cost of living support and other relevant benefits?

5. Have you reviewed your workplace benefits to see if there are any that can be used to reduce your regular costs, such as food shopping or gym membership?

6. Does your employer offer any further assistance, such as a hardship loan; workplace loans at a lower rate; mental health first aiders; and debt counselling via your Employee Assistance Programme? If you are struggling, your employer will definitely want to know so they can do what they can to help

7. If you have an emergency savings think about introducing some of it each month as ‘top-up’ income to help through a period of difficulty

8. Are there any savings plans you can reduce or pause for a short period? Use tools and modellers to see the impact and to see how to get these savings back on track when your finances are more stable

9. For mortgages, loans and rent make sure you talk to your provider if you have difficulty in making the repayments – reputable providers will often be willing to agree an alternative repayment plan

10. Seek help early – there are many charities and organisations that can help such as Citizens Advice, National Debtline, StepChange, Money Helper, Samaritans

 

There will always be things outside of our control that may impact our money. But the key point to focus on is that this time will pass. Economies can have their difficult times but they pass; energy costs will fall as we move into the spring and summer months; inflation, interest rates and mortgage rates will also fall in the future.

Until then:

1. Ensure you have savings in easy to access accounts/investments in case you need to rely on them

2. If you can bolster your emergency fund a bit to rely on in the future, do so

3. With any medium and long term investments, remember these are designed to perform over periods of 5 years or more, so short term market volatility is likely to iron itself out over the longer term

4. Review whether financial protection such as income protection or ill health cover will give you greater peace of mind for very little outlay

5. With savings and investments, don’t over commit to restricted access investments – you may need more flexibility to access these in the short term

Everyone will worry about money at some time or another, and right now in the UK there are challenges that mean we are all focusing more than usual on our money. If you are feeling anxious about your finances, remember that there is always something that can be done to improve things, and it’s important not to struggle on alone – seek help early, including talking to your employer.

 

To find out how Close Brothers can help improve the financial wellbeing of your employees, go to our financial education services page or call us on 0800 028 0208

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