Facing up to Financial Fears

Mental health and money problems are often 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.

Facing up to your fears is the first step in taking control of the situation. Here’s five tips on how to get started.

Don’t be an ostrich

Checking your bank balance makes you anxious, so you avoid it. But sticking your head in the sand won’t make the problem go away – it just stores up stress for the future.

The only way to beat the fear is by confronting it head on. Set aside a time and place to dig into your financial situation and get all the information in front of you. Going through your bank statement may be unnerving, but it’s the first step to acknowledging where your money goes every month and where you could make savings.

It will make you anxious but try to remember that it will pass, and don’t let it stop you from checking your balance (which you really do need to do).

Make a plan

It’s important to work out exactly what’s worrying you. Are you struggling to meet day-to-day expenses, burdened with credit card debt, saving for a house deposit, or wondering when you can afford to retire?

Whatever problem you’re facing, your plan to fix it will need to include budgeting – how much you’re currently spending on different things, how much you should be spending, and how much you’d like to be saving – as well as a list of solutions to looming issues.

If you’ve never made a budget before, there are plenty of online resources such as budget calculators and tools to get you started. Once created, put your budget somewhere visible like the fridge door to help you stick to it.

Help is at hand

Whilst making your plan, it’s a good idea to seek advice from reputable sources on the best course of action for specific problems.

For example, Citizens Advice offers help with debt.

Other organisations offering helpful advice online include:

• Money Advice Service, or call 0800 138 7777 from Monday to Friday, 8am to 6pm
• National Debtline, or call 0808 808 4000 from Monday to Friday, 9am to 8pm
• StepChange Debt Charity, or call 0800 138 1111 from Monday to Friday, 9am to 5pm

Saving for a rainy day

It depends on your personal circumstances, but it’s often better to clear any outstanding debts before you try to save.

As part of your budget, you’ll have worked out how much you can afford to pay off every month and how long it will take to be debt-free. As a rule, start by reducing any debts on store cards and credit cards and then tackling your overdraft. Check what interest rate each is charging and start with the most expensive.

Once you’re able to save, treat savings as another bill that has to be paid, rather than an optional extra if you have money left over at the end of the month (because when does that ever happen?)

It can also be a good idea to set yourself a goal. Having something tangible to aim for will make you more motivated to save and less likely to dip into your savings for unnecessary purchases.

Keep good habits

Having a plan and sticking to it will make you feel calmer and more in control of your finances. Over time, the choices you make to spend responsibly, clear debt, or pay into a savings account will add up to a healthier financial situation.

Even if things are going well, it’s important not to slip back into old habits. Check your bank balance every couple of days – installing a banking app on your phone means you can login in seconds and keep track of money going in and out.

Pay bills as soon as you can. Letting them hang around will just stress you out and makes it more likely that you’ll miss a payment. Set up direct debits where possible so you don’t have to remember to make the payment yourself.  

When confronted with something scary, our natural response is to run away. But ignoring money worries can have a devastating impact on our mental health and make it increasingly harder to tackle the problem.

Hopefully, the tips above will help you move forward with your finances and explain how taking steps to improve the situation can improve your overall wellbeing.