Five ways to stamp out financial stress
Studies show that many of us find financial matters very stressful, whether we have too little money or more than enough , but there are things you can do to help combat this and feel calm about your cash. Here are five things you can do.
1. Make time to face facts
If you don’t know where your money is or where it is going, it is easy to be anxious about what is happening with it. So set aside a time to go through your bank accounts, pensions and investments to ensure you understand the state of play.
This may mean finding passwords, writing to former employers about pension funds that have not been consolidated, and going through old bank statements so make sure you put aside a time and space that will be sufficient for your needs.
If you have lost pensions, try the pension tracing service at https://www.gov.uk/find-pension-contact-details. If you think you might have lost a bank account or other asset, try https://www.mylostaccount.org.uk - a joint venture between the Government’s National Savings and Investments, the Building Societies Association and the British Banker’s Association.
It is also sensible to go through credit card statements and any loans at this point. You will feel less stressed about your money if you know where it all is.
2. Consolidate where possible and make your money visible
Having money in lots of different places is stressful, so if you have lots of accounts and investments it may be worth looking to put them all in the same place, so you know where they are.
Technology can help you to ensure that you can see all of your finances at a glance. Open Banking apps such as Emma, Money Dashboard and Yolt can help you to see your whole financial position at a glance.
3. Build an emergency fund
However big or small your bank balance, you need to have some of it accessible and the rest working as hard as it can. A best-buy easy access account with three to six months of expenses in it ensures that you can deal with unexpected expenses such as a car breaking down or an unexpected household accident.
Once this fund is set up, you can ensure other cash is invested for the longer term, working as hard as you need it to towards your goals.
4. Automate what you can
Whether it is paying bills, investing regularly, or ensuring that your money is moved from current accounts to savings at the end of the month, ensuring that you set up direct debits to take the strain will save you a lot of stress.
While you’re at it, ensure that you’ve also set up alerts with your bank to tell you if you are likely to slip into your overdraft unexpectedly. Many will also have a ‘sweep’ function that puts excess cash into a nominated savings account at the end of each month, saving you another financial task.
5. Bring in the professionals
When it comes to investing for the future, whether through a pension, an ISA or another structure, looking at the value of your money moving day-to-day can be stressful if you choose to do it yourself. Putting your cash in the hands of a qualified adviser who takes your wishes, goals and risk tolerance into account can help you to relax about your money.
Ensuring you check in with your adviser at agreed intervals will help reassure you that things are on track and flag up issues without creating extra stress in the meantime.