National Stress Awareness Day falls on 1st November in 2023, and it’s a good time to pause, reflect and explore the often overlooked link between finance and stress.
Many of us have experienced the pressure and stress that finance can put on our lives, especially during difficult times. A 2023 survey by the Mental Health Foundation found that 10% of UK adults feel ‘hopeless’, 34% feel ‘anxious’, and 29% feel ‘stressed’ about their finances.
With November’s NSA Day falling in the middle of a cost-of-living crisis, can we expect to see a rise in mental health problems related to people dealing with additional financial stress this year? If so, what are the ways to cope with financial stress and be mindful of the impact it has on our overall wellbeing? Loqbox looks at ways to deal with financial stress and instil healthy habits to manage it.
The link between finance and stress
Whether it’s mounting debt, unexpected costs, or job insecurity — these real world issues can lead to feelings of anxiety, worry, and depression, which in turn can have a knock on effect to your physical health. The connection between financial stress and mental health is clear. Money worries are one of the most common causes of stress and anxiety in the UK and can affect our quality of life.
Take a moment to think about what your overall wellbeing would be like if you felt in control of your finances today. Do you think you’d feel less stressed? Or more confident that you’ll be able to clearly plan (and reach) the goals you’re looking to achieve? Or perhaps a combination of both?
The Money and Pensions Service describes financial wellbeing as meaning “feeling secure and in control of your finances”. Whether you prefer to call it ‘financial wellbeing’, ‘financial wellness’, or ‘financial fitness’ — the concept is something that you can start implementing in your life now to avoid financial stress in the future.
Loqbox puts financial wellbeing at the forefront of our members’ journeys. We believe that everyone is entitled to enjoy a happier, healthier relationship with money and to be able to achieve their financial goals — which is why we are proud to say that we’ve already helped over 1,000,000 people live a richer life. Check out Loqbox Coach to see how we can help you get started.
How your finances can affect your mental health
Worrying about your money can have a real impact on your wellbeing. You could lose sleep from anxiety about bills or debt, or even be triggered by feelings of panic when you open letters or organise things like your benefits. Sometimes these emotions can affect your relationships and leave you feeling lonely and isolated.
If you’re struggling with money, it may be more challenging to be able to afford things that you rely on to support your mental health. That could be anything from your housing situation, food, bills, access to exercise facilities, medicine, or therapy. This leaves an already precarious emotional state without its usual safety-nets.
How your mental health can affect your finances
When someone is struggling with feelings of stress, anxiety, or depression, it could then lead to further financial problems, which themselves can exacerbate those conditions.
When a person’s mental health is affected by financial stress, they could make more impulsive or irrational decisions about money. They may even try to spend more than usual as a coping mechanism. (Retail therapy might give a quick high, but it can ultimately leave you worse off.)
They may also need to take leave from their job as a way of dealing with financial stress. This can have the knock-on effect of reducing their income, and therefore find it more challenging to overcome these issues quickly and effectively. It’s all down to the management of your financial wellbeing, which, together, we can do.
How to reduce financial stress
Prevention is key! Practice mindfulness about your money, and take control of anything that could exacerbate a negative effect on your wellbeing. Whether that is financial, mental or physical, they are all linked, so build your peace of mind with these simple ways of coping with financial stress:
Start by creating a realistic budget that outlines your income, expenses, and savings goals. Having a clear financial plan can reduce uncertainty and anxiety. You’ll often hear people say that when you’re feeling overwhelmed you should make a list. And it works! Getting the problem in black and white helps you to contextualise it.
You may even find that it isn’t as big, or unmanageable, as you first thought. And even if it is, you already have the makings of a plan to deal with it. You can read about different types of budgeting rules here, to find the one that’s right for you and your individual financial circumstances.
Pay debts first
Once you have your budget in place, it’s time to take on any debt you may have. Tackle your debts systematically, prioritising high-interest loans as the interest that you pay on your debts will likely be far higher than the interest that you will earn from any savings.
So by reducing your debt burden over time you’ll not only relieve your financial stress, but when your debt is paid off, you’ll have extra cash to put towards your other financial wellness goals.
If you do have any debts to settle you can prioritise them using the Avalanche method explained in the link below.
Build your credit score
It’s highly likely that at some point we’ll all need access to finance, loans or borrowing in the future. And it’s important that when you do, you get the best possible deals when you really need them.
Lenders can, and do, charge more interest to people who they deem as ‘higher risk’ (meaning people with negative markers on their credit files, or who have little to no credit history). So, the best thing to do is to steadily build your credit history and monitor your credit file.
Your credit score is a number that tells you how creditworthy your credit report appears to potential lenders. You can use yours as a tool to help you prepare and understand if you’re likely to be offered credit and, crucially, at a good deal. Having a strong credit score improves your chances of being accepted for credit cards, loans, and mortgages with those better rates, which can save you £1,000s in the long term.
Building your credit score can help you improve your financial wellbeing, and we’ve made it very easy for you to do. Check out our Full Loqbox membership plan to see how we can help you enjoy a happier, healthier relationship with money. Our members have seen their credit scores rise by up to 300 points in the first three months of using all our credit-building tools at the same time.
Improvements to your credit score are not guaranteed.
If your financial stress and mental health feels overwhelming, or like it is getting out of your control, don’t be afraid to reach out for help. This could be from a trusted friend, family member, or from a professional. Either way, it’s important to remember that while they may not always be able to solve the problem, you don’t have to do this alone.
National Stress Awareness Day 2023 is organised by the International Stress Management Association (IMSA) to raise awareness of the impact of psychological distress in the workplace and finding coping strategies to overcome it. You can find out more about IMSA here.
Building an emergency fund can provide a safety net for unexpected expenses, offering peace of mind during challenging times. Using your budget, you can actually get ahead of any financial stress by saving towards an emergency fund. This would usually be a savings pot of somewhere between three and six months of your income.
Top tip: why not use your savings to grow your credit score as well? Loqbox Save helps you do both at the same time.
Your monthly savings payments are reported to the UK’s three main credit reference agencies, helping to improve your credit score with responsible use. And at the end of the year, your savings are unlocked along with a shiny new credit score.
Improvements to your credit score are not guaranteed.
Handling financial stress for a healthier life
On National Stress Awareness Day 2023, take a moment to reflect on your financial situation and its impact on your overall wellbeing, and the wellbeing of those around you.
Remember that you are not alone in dealing with financial stress. There are resources and strategies available to help you cope and regain control of your financial future.
Loqbox is here to walk beside you and cheer you to the finish line of your financial wellbeing journey. If you’re ready to take the first step, get started with Loqbox Coach to access your free personalised financial plan — available with our Lite (free) or Full Loqbox membership (£2.50 per week).