Page 7 - LiveWire Edition 19

May Health Calendar
Spotlight on Financial Wellbeing
This month we put the spotlight on financial wellbeing.
All of us have financial wellbeing and having positive financial habits can have huge impact on our physical and mental wellbeing. For a lot of us, finances are still a taboo topic, but it is important to address our finances and understand how we can keep them looking as healthy as we can.
It's probably not news to you that the state of your finances can have an impact on your mental health. According to the Money and Mental Health Policy Institute, around half of adults in the UK who are in problem debt also have some form of mental health issue, while people who are in significant levels of debt are more than twice as likely to develop major depression as those with no debt worries at all. As such, developing a state
of financial wellbeing is really important, not only for the health of your finances but for your mental health too.
Mental health and money problems are often intricately linked. One problem can feed off the other, creating a vicious cycle of growing financial problems and worsening mental health that is hard to escape.
Across England, more than 1.5 million people are experiencing both problem debt and mental health problems.
People in problem debt are significantly more likely to experience mental health problems.
Half (46%) of people in problem debt also have a mental health problem.
86% of respondents to a Money and Mental Health survey of nearly 5,500 people with experience of mental health problems said that their financial situation had made their
mental health problems worse.
Almost one in five (18%) people with mental health problems are in problem debt.
People experiencing mental health problems are three and a half times more likely to be in problem debt than people without mental health problems (5%).
72% of respondents to Money and Mental Health’s survey said that their a mental health problems had made their financial situation worse.
Six effective financial habits to adopt:
1 Avoid making financial decisions when emotional: Studies have found that people
who are sad will pay more for something or sell
it for less, compared with those who are in a normal emotional state. Being highly stressed can lead
to impulsive or irrational financial decisions. In these situations, the age-old advice of “sleeping on it” makes a lot of sense.
2 Tune out the noise: Avoid looking at your financial position too much. As a general rule, look at your cash position weekly and your investment portfolio yearly. If you’re investing for a 40 or 50 year
time horizon, why worry about what is happening this week, month or year? As the legendary fund manager Peter Lynch put it: “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections, than has been lost in corrections.”
3 Just say NO: Whether it’s a meal deal instead of just a sandwich or paint protection with your expensive new car, developing the habit of saying no to add- ons, upgrades or special deals stops you spending more money than you planned.
4 All Pounds are equal: Research shows we treat money differently depending on where it comes from. We are more likely to spend a rebate than
we are a bonus. Adopt the habit of treating all your inflows, whether salary and pension increases, tax rebates, bonuses or premium bond winnings, the same as core income. That means directing it to the same spending priorities, including saving for your future self or reducing debt, as core income.
5 Forget Love Island: Watching a lot of reality
TV or exposure to “lifestyle” social media has been found to increase people’s sense of inadequacy and insecurity because they don’t conform to the unrealistic physical look or curated “perfect” lifestyles on show. This can lead to impulse and emotional spending to fill the void. If you can’t stop watching reality TV, at least be clear about what’s important to you in life and what matters.
6 Replace a bad habit with a good one: Your
money habits may be highly ingrained, and you might think you can’t change. But, as long as you have a clear idea of what you stand for and what matters most in your life, you can then design your financial environment and routines so that it’s easier to develop habits that are conducive to your financial wellbeing. Swap regular bottles of wine for occasional drinking, and use the saved money
for a better habit.