With everything that’s going on in the world right now, it’s natural to feel a little anxious about the future, but a sudden change to your personal financial situation can have a major impact on your mental health.
Many of us are losing sleep over our money worries during the pandemic, and living with ongoing stress can cause other health issues like migraines, heart disease, diabetes, anxiety, and even depression.
Feeling anxious or low is a normal response to a change in your finances – whether you’re struggling with debt, have recently been made redundant, or are concerned about the future of your job role.
“These are uncertain times and many people who would usually be careful with their finances have found themselves in unknown territory with a sudden drop in income, or even a job loss,” says Dr. Paul McLaren, medical director, and consultant psychiatrist at Priory’s Hayes Grove Hospital. “For many, financial security goes with emotional stability, and the uncertainty of the future poses a particular threat.
“It can be difficult to keep motivated and remain optimistic, especially for those who have found themselves put out to furlough or who have lost their job, often without any warning or consultation.”
Experts offer their advice on how to look after yourself mentally and feel more in control in the face of money worries.
Face Up to Your Finances and Budget, Budget, Budget
“The easiest way to start combating financial anxiety is to keep a closer eye on day-to-day spending, work up a budget, and stick to it,” says personal finance expert Salman Haqqi. “That way, you can better identify areas to make savings and ensure your outgoings are not exceeding your income. If you’re not sure where to start, there are lots of helpful budgeting guides on the internet to help you get started.”
Prioritize Paying Off Debt If You Can
“The burden of debt is one of the biggest contributors to financial anxiety, so learning how to manage it is really important,” says Haqqi. “If you’re on a restricted budget and are anxious about meeting credit card or mortgage payments, you must speak to your bank to see what support they can offer. Do remember that if you take a debt payment holiday, you may still be charged interest, which means that your monthly payment will increase and the total amount you owe could also grow.”
“Shifting existing credit card debt on to a 0% balance transfer card can be a great way to help clear your debts. Before committing to a new card, make sure you can afford to pay it back within the promotional interest-free period, in order to avoid adding additional interest charges.”
Build an Emergency Fund If You’re Worried About the Future
“If you’re fortunate to be earning the same but spending less than you were before the Covid-19 outbreak, use this time to pay off existing debts or put some money into savings to protect you against any unforeseen circumstances,” advises Haqqi.
Do It All From the Palm of Your Hand
“Money management isn’t everyone’s strong point, and there are many apps and tools available that make it simple,” says Haqqi.
“Apps like Emma, Yolt, and Moneyhub can help you to keep track of day-to-day spending, whilst app-based banking means that you can keep a closer eye on things.”
Talk Out Your Worries
“Make sure you talk to people you trust about any worries you may have, as they could give you some great advice and may have gone through similar situations before, making you feel less alone,” says Andy Barr, personal finance expert, and co-founder of Alertr.
“If you are furloughed and worried your reduced pay won’t cover certain bills, talk to your providers to see if you can come to an agreement until things are back to normal. Hiding away from a financial issue is the worst thing you can do; there is help out there and most companies will be willing to put payment plans in place as the pandemic continues and people are affected globally.”
Have a ‘Money Hour’
“I think it’s a good idea to set a specific time in the day to deal with your finances and limit thinking about it to your ‘money hour’,” says McLaren. “Anxious ruminations or repetitive thinking will not generate cash or solutions, and it will just keep you awake and make it harder to deal with your problems. Value sleep above all else, and do everything you can to maintain a routine — using your bed for sleeping and not worrying or feeling anxious.”