The Art of Living Financially Well.
July is known as National Savings month and what better time to have a look at your saving habits.
A number of studies have demonstrated a cyclical link between financial worries and mental health problems such as depression, anxiety, and substance abuse.
According to the Cleveland Clinic, some stress is good, as stress is our body’s response to changes or challenges. It helps us respond to and cope with life’s daily challenges. However, chronic stress and anxiety is not good for your long-term wellbeing. When it comes to financial wellbeing it is important to first identify the feelings and emotions you have around money. This might be a stepping stone in helping you to spot patterns in your behaviour, around money to start taking the right steps in order to take control of your finances and mental health. Some steps you could consider:
Take inventory of your finances.
If you’re struggling to make ends meet, you may think you can ease your stress by leaving bills unopened, avoiding phone calls from creditors or ignoring bank and credit card statements, but denying the reality of your situation will only make things worse in the long run. The first step to devising a plan to solve your money problems is to detail your income, debt, and spending over the course of at least one month. A number of websites and Smartphone Apps can help you keep track of your finances moving forward.
Include every source of income.
Include other sources of income you may receive in addition to your salary e.g. bonuses, benefits, alimony, child support or any interest income you receive.
Keep track of all your spending.
When you’re faced with a pile of past-due bills and mounting debt, buying a coffee on the way to work may seem like an irrelevant expense, seemingly small expenses can mount up over time, so keep track of everything. Understanding exactly how you spend your money is key to budgeting and devising a plan to address your financial problems.
List your debts.
Include past-due bills, and late fees, and list minimum payments due as well as any money you owe to family or friends.
Identify spending patterns and triggers.
Does boredom or a stressful day at work cause you to head to the mall or start online shopping? When the kids are acting out, do you keep them quiet with expensive restaurants or takeout meals, rather than cooking at home?
Once you’re aware of your triggers you can find healthier ways of coping with them than resorting to “retail therapy”.
Look to make small changes.
Spending money on things like a morning newspaper, lunchtime sandwich, or break-time cigarettes can add up to a significant monthly outlay. While it may be unreasonable to deny yourself every small pleasure, cutting down on nonessential spending and finding small ways to reduce your daily expenditure can help free up extra cash to pay bills.
Eliminate impulse spending.
Ever seen something online or in a shop window that you just had to buy? Impulsive buying can wreck your budget and max out your credit cards. To break the habit, try making a rule that you’ll wait a week before making any new purchase.
Go easy on yourself.
As you review your debt and spending habits, remember that anyone can get into financial difficulties, especially at times like this. Don’t use this as an excuse to punish yourself for any perceived financial mistakes. Give yourself a break and focus on the aspects you can control as you look to move forward.
Create a budget.
Our AskNelson counsellors are available to teach you how to create a budget and stick to it. As well as knowing the 50/30/20 percentage split on your expenses, so that you can restrict yourself on spending and focus more on developing a habit of budgeting to try to have enough money till the end of each month.
Money talks remain somewhat taboo in some communities, so challenge yourself and your family to get into the habit of saving this National Savings month.
Share your savings tips. #waystosave