how to protect your money and your sanity

As the cost of living rises, we take a look at how you can care about both your money and your sanity

Lately, we feel like we’ve been stuck in a rising tide of pressure, as we’ve faced one thing after another. And with the rising cost of living, many of us will be worried about the immediate future.

The Resolution Foundation think tank estimates that 1.3 million more people will fall into absolute poverty in 2023, including 500,000 children – and middle-income people will likely also feel the pressure as monthly bills and expenses rise. will increase.

It goes without saying that this will have an impact on our mental health, because financial well-being and mental health are linked. In a survey of over 1,000 people by the mental health charity Mind, 73% said that when their mental health is poor they find it harder to manage their money, and 74% also said the difficulty in managing their money subsequently affected their mental health. health.

“If you are living with a mental illness, you may have reduced income, face increased costs or find it difficult to budget, while money worries can also put a strain on your mental health, leading to increased stress, worry and anxiety,” Laura Peters, head of mental health and financial advice at the charity Mental Health UK, explains. “This can create a worrying cycle that can impact other areas of your life, such as your relationships, your job, or where you live. Improving your financial security and understanding the best way to manage your money can have a extremely positive impact on your mental health.

Money where your mouth is

But, truth be told, even talking about money can be difficult, let alone taking steps to manage it. Of course, talking about it is the first step to getting help – both practical advice and emotional support – but our fears and anxieties are often an additional barrier.

“There are lots of reasons why people find it hard to talk about money worries,” Laura says. “Parents or guardians may feel pressure to support loved ones who rely on them. Some of us might want to keep up with their friends, even though we can’t afford to keep up with their spending habits. And many people in debt tell us that they feel tremendous shame and stigma around their situation.

In a study conducted by the Money & Pensions service in 2020, which surveyed more than 5,200 people across the UK, researchers found that almost half of the adult population (48%) said they had worried about money once a week or more in the past month. It would be fair to say that number may have increased in 2022, but the survey also looked at the most common reasons UK adults avoid talking about their financial situation, finding ‘shame/embarrassment’ , “not wanting to burden others”, “It’s not how they were raised”, “It causes stress or anxiety”, and “Thinking they should be more successful than they aren’t” were among the leading causes.

“Money worries can make people feel really isolated, but a lot of people will have money worries at some point in their lives,” Laura says. “You are not alone, and it is important to know that support is available for you. You’ll find lots of helpful advice on the Mental Health and Financial Advice website.

“It can also help to open up to friends or family, perhaps for a walk or over a cup of tea – it’s not something you want to discuss just before splitting the bill. for dinner or finding out it’s your turn to get If you can share how you feel, not only can they hopefully offer emotional support, but they can also suggest plans for you to spending time together without it costing the earth.

Facing a financial shock

“Financial shocks will be different for all of us,” says Laura. “It could be an expensive bill you hadn’t budgeted for, an essential item that breaks and needs to be replaced, or a big life event like a relationship breakdown, loss of a job or the birth of a baby.

“You might want to avoid thinking about the financial problems it could cause, but we always advise anyone going through this kind of shock to get the problem resolved as soon as possible, so you can get help with create a plan that can help you handle the situation.

In an ideal world, we would have savings to cover this stuff. But that’s not always possible for everyone, and when financial shocks hit, it can be easy to go into panic mode. As tempting as it may be, try to steer clear of high-interest payday loans or credit card debt, and instead take a look at your spending to see if there are any something you’re overpaying (e.g. are you paying too much for your phone contract?), or areas you could downsize until things balance out a bit more.

“Also, if you feel comfortable doing so, you may find it helpful to open up to friends or family so they can help you through this and relieve you of the pressure of life. ‘trying to keep up appearances – which won’t improve your financial situation or your mental health,’ adds Laura.

hard times

Since many of us will be facing tight financial pressure in the coming year, it’s important to be realistic about what lies ahead and the ways we may need to adjust. But being realistic also means trying, as best you can, to get rid of shame and stigma. Money matters are complex and depend on many different factors, so financial difficulties are never just a case of “mismanagement”.

And, one last reminder, you really don’t have to deal with money problems alone. Whether it’s contacting your support network or organizations that can advise you on your next steps, help is free.

If you’re struggling with stress due to financial worries, talk to an experienced and qualified therapist or visit the Advice Directory.