More than a quarter of people feel anxious about money, according to research from the Money and Pension Service (MAPS). People that have recently experienced poor mental health are more likely to worry about finances, which in turn can further harm their wellbeing.
The research highlights the link between mental health and feeling in control of finances.
As financial security can affect many other aspects of your life, from your ability to cover daily expenses to planning for your future, it can have a huge effect on your wellbeing. Feeling confident about money decisions is important for mental health.
The research found that 57% of people who have experienced a recent mental health problem say thinking about their financial situation makes them anxious.
There are many reasons why poor mental health can affect financial security. It may mean people need to take some time away from work or that they don’t feel up to making financial decisions. This can lead to poorer financial security which exacerbates anxiety when thinking about money.
The research found that among those who have experienced mental health challenges in the last three years:
- They are four times as likely to be behind on priority bills.
- They are four times as likely to borrow to pay off their debts.
- They are almost three times as likely to often borrow to buy food or pay bills.
Even among people who haven’t experienced poor mental health, many feel anxious when they think about finances. Yet, just 1 in 5 people who are worried about money seek support.
As the cost of living rises and budgets come under more strain, it’s more important than ever to understand your financial situation and seek help if you’re feeling worried.
Caroline Siarkiewicz, chief executive officer at MAPS, said: “We know that money worries and poor mental wellbeing often go hand in hand. This is a challenging time for many people dealing with the after-effects of the pandemic and cost of living pressures. This is tricky enough for anyone, but can be particularly challenging for people also dealing with mental health problems.
“Despite this, we know that many people across the UK generally struggle to talk openly about money.”
5 things to do if you feel anxious about your finances
1. Don’t put off reviewing your financial situation
If you’re worried about money, it can be easy to put off the task of reviewing your finances. If your mental health has been affected, this is even more likely to be the case.
However, being proactive can help you reach a better place financially, feel in control, and boost your wellbeing. If reviewing your finances seems like too much, breaking it down into smaller tasks each day can help. Start with the tasks that are most likely to affect your day-to-day finances, such as your budget or debt you may have, and gradually work your way up to tackling things like your savings or pension.
2. If you’re falling behind on payments, contact your creditors
The MAPS research highlighted how poor mental health can lead to people falling behind on priority bills or increasing the amount of debt they have.
If you’re struggling to keep up with financial commitments, one of the first things you should do is reach out to providers and creditors. It can be a scary thing to do but remember it’s something they will deal with every day.
Creditors may be able to offer support, such as giving you a payment holiday, freezing interest, or creating a long-term repayment plan. By taking this first step of getting in touch, you can begin to improve your long-term financial wellbeing and how confident you feel about the future.
3. Create a budget that prioritises your spending
A budget can help you better manage your finances. By setting out how much you need to spend on different areas, from utility bills to transport, you’re less likely to overspend and find that you don’t have enough at the end of the month.
When creating a budget, prioritise the different areas you need to spend on. Which bills are essential, and which areas could you cut back on if you needed to?
If you have debt, you should prioritise how you repay this too. Where possible, make the minimum payments for each form of debt to avoid falling into arrears, and make overpayments starting with the debt that has the highest rate of interest.
4. Remove temptations to overspend
With online shopping just a few taps away, it’s easier than ever to impulsively buy something and overspend. It’s more likely to happen when you’re suffering from poor mental health as you may seek the short-term boost a purchase can give you.
Making it more difficult to spend money can help you stick to your budget and start to improve your finances as it can give you time to think about whether a purchase is a good idea.
Think about when and how you may overspend. If you’re tempted by online shopping, removing saved card details from your computer or phone and unsubscribing from tempting newsletters can help. If you find you often dip into money allocated for other expenses when you’re out, creating a separate account that holds your disposable money can be useful.
5. Speak to someone about your situation
Several charities and organisations offer support if you’re struggling financially and mentally.
Seeking support and opening up about the challenges you’re dealing with can be difficult, but it’s a step that can give you access to expertise and resources that can help you build financial confidence.
If you’re struggling financially, Money Helper is a good place to start. You can receive confidential debt advice online or over the phone.
If you’re worried about your financial future, such as whether you’re saving enough for retirement, how to support loved ones, or how to get the most out of your money, we can help.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.