How’s your Financial Wellbeing?
What is wellbeing?
You’ve probably noticed in the last few years that there has been a bit of a buzz around the notion of wellbeing, even the NHS have issued tips on ways to improve mental wellbeing.
Wellbeing is not a new phenomenon, over the last few years it has become a more pressing concern, as increasing numbers of people are being diagnosed and signed off work with stress related illnesses. It has been reported that in the UK alone, 17.5 million working hours are lost due to employees taking time off to deal with emotional stress.
Much of the advice on improving wellbeing has focused on keeping active, connecting with people and taking time out for yourself; however less attention has been paid to financial wellbeing and the impact this can have on your general sense of personal wellbeing.
What can affect your financial wellbeing?
A recent study carried out by Barclays Bank found that 46% of people worry about their finances and 1 in 5 of us experience sleep problems and/or performance at work as a result. Main areas for concern include:
- Not having enough money set aside if you were unable to work – 2 in 5 of us have only 1 months’ worth of savings to tide us over.
- Lack of general savings – Money Advice Service found that in the UK over 16 million adults have less than £100 in savings.
- Debt – it is incredibly easy to get into debt and people are increasingly tempted to fund their purchases with credit cards and overdrafts.
Money worries are often attributed to a lack of financial education as many people don’t possess the know-how to improve and manage their finances. Worryingly only 35% of us feel enthusiastic about our financial future.
What can be done to improve your financial wellbeing?
Financial planning can help you to feel more in control of your finances and alleviate a degree of stress, below we have listed four ways to take back control of your finances and improve your financial wellbeing:
Make a plan
Make a plan in which you can track your outgoings and incomings, ensuring that you are working towards your financial goals – whether that may be early retirement or the holiday of a lifetime! A financial plan can help to minimise the stress you may be experiencing whilst worrying about your finances. A financial adviser can help you to set your financial goals and suggest ways in which to meet them.
Prepare for financial shock
Many people do not have enough money in savings to protect them if an accident or illness was to happen and they found themselves unable to work or facing significant medical costs.
The prospect of not having enough money to cope with these kinds of unexpected events is likely to stress most of us out, however this stress can be greatly reduced by having a plan prepared. This could be by increasing your savings and cutting down on other monthly outgoings or by reviewing your insurance policies.
There are a number of different health insurance policies which will provide a lump sum or regular payments if you found yourself unable to work due to sickness or an accident. For more information on the different protection policies available then please read our factsheet.
Set realistic goals
How much savings is enough? Instead of continuously saving and always feeling like it’s not enough, set a goal which is based on your circumstances and is achievable. You will feel more in control and as a result less stressed, as you steadily work towards meeting your goal.
Taking care of your loved ones
If you financially support your family or other dependants then you may find yourself feeling under a great deal of pressure, worrying about how your financial dependents would manage after you pass away, leading to unnecessary stress.
There are various assurance policies in which you can ensure that your financial dependents continue to enjoy the same standrad of living, if you were to die. If this is a concern for you, then you may benefit from speaking to a Financial Adviser who will be able to work with you to create a financial plan which would take care of your financial dependents.
As with your mental wellbeing, your financial wellbeing can be greatly improved by making small changes and where necessary seeking professional help. If you would like to discuss any of the points raised in this article please do not hesitate to contact us.
01727 85 22 99 | mail@kdw.co.uk