Control your mind over money matters

A report has revealed poor knowledge of finances can cause stress and anxiety. Here are some simple ways to get a better hold of your funds and improve your wellbeing

The last year has brought economic hardship and confusion to many. A new study by financial coaching app Claro found that a fifth of 18 to 40 year olds in the UK had huge concerns about their cash flow and, worryingly, understood little about it – resulting in poor emotional and general health.

“Finances can be a major cause of anxiety and fear, but we’re more likely to talk about our sex lives than our finances,” says Simonne Gnessen, founder of Wise Monkey Coaching and co-author of money advice book Sheconomics.

And after it was revealed that women had been hit harder by the pandemic and are less confident than men when it comes to money, it has never been more important to understand how we can be savvier with our cash. Here are some helpful tips to improve both your bank balance and your mental health.

DON’T BLAME YOURSELF

“Most of us weren’t taught about managing our money in school or by our families, which means many of us have picked up the wrong kind of lessons around finances,” says Simonne. “While parents’ teachings are usually well-meaning, it’s common to be given mixed, conflicting messages, either explicitly or implicitly, via their behaviour around money.”

They might have told you to never buy something you can’t afford, for example, while you may have seen them frequently paying for costly treats on credit cards and then having stressful conversations around that debt.

“The first step to improving your financial situation is honesty. Look at the way you manage your money and where those habits came from. Go through your bank statements – are you always in your overdraft like your mum? Do you rack up credit cards debts like your dad? Remember, whatever patterns you’ve picked up, you can change them.” What’s more, huge corporations rely on our lack of knowledge to manipulate us. “Marketers play on our emotional connection to money with strategies like ‘buy two, get one free’ or ‘buy now, pay later’ to encourage us to purchase their products,” she says.

FIND INSPIRATION AND BLOCK TEMPTATION!

Do you feel like others are much smarter with their cash and you don’t know where to begin? “There are many fantastic free resources available to help you brush up on your financial literacy skills,” says Simonne. “Podcasts, newsletters, books, apps and blogs are great places to start – work out which areas you’re interested in or need help with (is it your money mindset, for example, or is it clearing debt?) and start curating who you follow and learn from.” Download apps like Emma or Plum, which are great for budgeting. Meanwhile, it can be useful to unfollow unhelpful accounts or newsletters that encourage reckless spending.

Simonne says, “Unsubscribe from emails with discount codes that lure you in and unfollow influencers or retailers that encourage you to ‘swipe up’ and shop.”

PUT SPENDING BARRIERS IN PLACE

Many of us splurge without thinking – partly because websites remember us and our card details, which makes it seamless to buy things online.

“In order to spend less and to build a healthier relationship with money, stop one-click purchases,” says Simonne. “Remove your card details from your phone to create more of a gap between the trigger and the response.” On some sites like Amazon, you can create a two-layer authentication before buying something – this can prompt you to ask yourself,

“Do I really need this?”

BE YOUR OWN PSYCHOLOGIST

Research indicates that when we’re sad, we part with money more easily than when we’re not (in one study, people who watched a sad video paid nearly four times as much for a bottle of water than those who watched a “normal” one). That’s why it is worth looking honestly at your relationship with spending. If we question why we want to hit “checkout”, we may find it easier not to.

“Think about what triggers you to spend and your emotional relationship with money,” says Simonne. “If you overspend, work out when that happens – is it when you are stressed or bored?

Put plans in place for when you might turn to emotional spending – can you make a friend your ‘accountability buddy’ to call when tempted (and vice versa)? Can you turn your phone or laptop off after 6pm to remove the temptation of online spending, or make a commitment to always keep items in your online basket for 24 hours before checking out to make sure you really need them?”

SHAKE OFF THE SHAME

“There tends to be an assumption that everybody else is doing better than us and,

because we don’t talk about our financial problems or lack of knowledge, it becomes shameful and secretive. That becomes a vicious cycle and means we’re less likely to take stock,” says Simonne. If you’re struggling with debt or bad spending habits, come clean to those closest to you. Simonne advises, “When we run from money problems, they usually get worse. Find somebody who can offer a safe space to share, and strategise with them how best to move forward.”

● If you feel very worried about debts, you can turn to UK debt charity Step Change at stepchange.org, or call their free helpline on 0800 138 1111. You can also speak to Citizen’s Advice on their chat facility at citizensadvice.org.uk, or call 0800 144 8848 (in England), or 0800 702 2020 (in Wales).