Coping with financial anxiety
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What can start as a passing thought about paying the bills and how you’re going to stretch your budget for the month can lead many to sleepless nights feeling like they have lost control. The good news is it doesn’t have to be that way. This blog will show you how to deal with your day-to-day money worries and give tips on how to control your money, rather than your money controlling you.
Focus on the positive
First, you should focus on the positive. Grab a pen and write down the positive aspects of your money management. Maybe you have a steady income, a stable job, your rent might be relatively cheap, or you might not have many financial responsibilities. Listing out the positives might reveal your financial strengths which may not have been obvious before.
Banish financial shame
This next step is very important. Past mismanagement can cause people to feel anxious when they think about money. This anxiety can start a cycle of more worry and future mismanagement. In The UK, 10% of households have debts three times bigger than the value of assets they own. As shocking as that sounds it reinforces that no one should experience financial shame when many others are in the same boat.
If you feel embarrassed about money it is important to know that although no one is going to come and make your bills disappear, you can take time and educate yourself. The more you know the more your confidence will grow.
Retool your budget
A lot of my money worries come down to me not budgeting. Many of us have the money to get what we need but maybe we treated ourselves the day after payday, leaving a financial gap at the end of each month. If money worries can work us up so much it shows that it’s worth taking time out each month to plan how much to spend.
Firstly, look through your bank statement to review how much you have been spending and on what it was for. This can sometimes be surprising. You may find that you spend as much on your weekly food shop as you are spending on something trivial like online subscriptions or treats at the weekend.
Once you have a good idea of what you have been spending your money on, it’s time to reduce what you spend. Your review may have shown that you’re spending too much on certain things. Online banking can help you budget. Whenever you buy something through online banks like Monzo, they automatically put your payment into a category, like ‘Transport’ or ‘Groceries’. On their app, you can see what you’ve spent on each category each month.
Once you have planned your budget it’s time to get saving. If Covid-19 has taught us anything it’s the value of saving. Savings can be the difference that allows you to weather any storm. You may also want to save for something like a holiday, a car, or even a deposit on a house.
Most online banking apps now have a ‘spare change’ feature. This rounds up your spending to the nearest pound and puts it in a separate account. So, if you bought something for £3.79, then £4 would leave your account but £0.21 would go into a separate account which you can withdraw from whenever you like. I use this and find its good for having an extra £20 at the end of each month.
When saving for larger things joining a credit union can be a helping hand. South Manchester Credit Union offers a range of savings accounts for different purposes. It is as simple as setting up a standing order. Our Christmas Club helps you save for the festive period by only allowing you to withdraw after 1st November. Another great account is our PrizeSaver. Every £1 put into a member’s PrizeSaver account counts as an entry into a monthly draw with a top prize of £5000.
Staying up all night worrying won’t solve your financial problems. But you have the power to take back control. Most of your financial anxiety comes from not feeling you know enough or losing track of your spending. Following the steps above will ease the load, give you confidence and make you feel in control. It is all a matter of working out your plan and then sticking to it.
South Manchester Credit Union is authorised by the Prudential Regulatory Authority (PRA) and regulated by the Financial Conduct Authority (FCA), and the Prudential Regulation Authority. FRN 213666.