With 77% of adults feeling ‘very’ or ‘somewhat worried’ about the rising costs of living, there has never been a better time to explore how tips and tools can help you to improve your financial wellbeing.
To be financially secure, a person must feel safe and in control of their finances. It is about making the most of the money you have from day to day, being prepared for the unexpected, and staying on track for a financially secure future. In summary, financial wellbeing is feeling independent, self-assured, and in control of one’s financial situation.
People who are financially secure report lower levels of stress related to financial matters. This, in turn, has a positive effect on their general mental and physical health, as well as their social wellbeing and wellbeing at work.
How can poor financial wellbeing affect people?
There is a strong connection between the state of your mental health and your financial well-being. Several researchers have found that stress related to money problems is often chronic, which means that it lasts for a long time. In addition to this, they discovered that the most common cause of stress for the majority of people is associated with financial concerns; in fact, they found that money worries were even more stressful than politics, families, and jobs.
Financial worries can impact our overall wellbeing, and cause:
- Anxiety, stress and depression
- Sleep problems
- Panic attacks
- Feelings of guilt and/or shame
- Poor concentration
- Lack of motivation
- A negative impact on social life and relationships with others
- Absence from work
- Low mood
- Lack of energy
- Loss of productivity
What can I do to improve my financial wellbeing?
Fortunately, when it comes to improving your financial wellbeing, there are some proactive steps you can take. Let’s take a look at some of them:
Get to know your finances and make a budget
It sounds obvious, but few of us sit down and organise our finances properly. It takes a bit of time to start, but in the long term it will help you stay on top of things. You can use one of the online budgeting tools (such as this one by Money Helper) or create a spreadsheet yourself.
As well as priority payments (like your mortgage, rent or utility bills) remember to include things like Netflix, gym membership, and other things that over time can add up. Examining your bank statements will help you to identify your outgoings and spending patterns, making it easier to view what costs could potentially be cut back on.
Make sure you know when bills and outgoing payments are being taken each month. This will help you to ensure you have enough money in your account to help avoid unarranged overdraft charges or bounced direct debits.
Regularly track your spending and try to get into a habit of saving
Once you’ve made a budget, keep a regular check on your spending against it. These days, most banking apps allow you to monitor activity on your account via notifications to your phone, so you can easily be alerted when money is going into your account or moving out of it.
One tool that some people use to help manage spending is the 50/30/20 approach. It involves setting aside 50% of your income for things that you need, 30% for things that you want, with the remaining 20% going towards debt repayment or savings.
If possible, try to save money, even if it’s just a small amount each month. If it helps, try to set yourself a saving goal to work towards. Having savings can help you to manage unexpected outgoings or changes to day-to-day living costs – helping to reduce additional stress and the need to take out a loan or go over your agreed account limit.
Get to understand the different types of credit and debt
Strengthening your financial position may involve paying off existing debts or loans. But with so many different types of debt and credit, it can be hard to know where to begin.
PayPlan have broken down the different types of priority debts and non-priority debts, so you can understand which missed payments can have the most significant penalties.
If you are struggling, reach out for support
If you are struggling with money worries, it can feel very lonely and isolating. But reaching out for support and advice, can make a big difference. With three in four adults (77%) reporting feeling very or somewhat worried about the rising costs of living, it’s important to recognise that you are not alone.
There are plenty of free resources online as well as organisations which offer free debt advice (see links at bottom of article). Don’t rule out talking to your employer as well as they can be a great source of support and can signpost you to appropriate help – such as an Employee Assistance Programme (EAP) if they have one in place. The same goes for reaching out to your bank, ultimately they are there to help you manage your money.
By talking to people about your worries – whether that is your employer, colleagues, friends, or family – you are helping to break down the stigma and are potentially helping others to open up about their own struggles with money.
Where can I find extra support?
The MoneyHelper Service – call 0800 138 7777 for free Monday to Friday, 8am to 6pm.
National Debtline – call 0808 808 4000 for free Monday to Friday, 9am to 8pm and Saturday 9:30am – 1pm.
Pay Plan – call 0800 280 2816 for free Monday to Friday 8am-8pm or Saturdays 9am-3pm.
Citizens Advice
Mind
Step Change
Sources:
Money and Pensions Service: https://moneyandpensionsservice.org.uk/2022/05/09/more-than-half-of-people-with-mental-health-problems-feel-anxious-when-thinking-about-money/
Ref: WPW0233 this information was reviewed February 2025
