The link between money & mental wellbeing

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Last updated: May 13, 2024

Money plays a pivotal role in our emotional wellbeing. It impacts feelings like anger, stress, anxiety, and sadness as well as mental health conditions. A report from Aston University found clear evidence to support the connection between mental health difficulties and financial challenges*. Whilst it is not the only factor, feeling on top of your finances can help to alleviate some of these feelings.

Money concerns affect many of us, no matter our level of income. Some common anxieties around money can be:

  • Will my level of income meet my outgoings? This could be due to rising costs, a change in job/leaving your place of work, or retirement.
  • Wanting to help loved ones, but being unsure if you can afford to.
  • Knowing whether you have the means to pay for care, if needed.
  • Knowing whether you have the means to cover costs if you were to become ill.
  • Paying debts.
  • Having enough money saved for emergencies.

There is a clear link between money and wellbeing, which is why you’ll find the topic in articles by charities like Mind, and even charities set up for that reason like Money and Mental Health. If worries about money are affecting your life, it is worth getting in touch with either of these for support.

Stephen Eve Financial Planning is part of the Financial Vulnerability Taskforce, we actively encourage best practice to ensure advice is provided in client’s best interests, including those who may be more vulnerable when it comes to making financial decisions.

Additionally, we are always happy to meet with anyone worrying about their finances. Discovery meetings are free of charge, with no obligation. We can point you in the right direction and provide impartial guidance**.

There is a stigma around financial planning. Many feel it is for the wealthy only. And whilst several of our clients are high-net-worth (we are under no illusion), financial peace of mind should be for everyone. So, do get in touch if you need a friendly chat about money. If we can take a little bit of the stress away, we’ve done our job.  

Tips to help you take control of your money & wellbeing:

Look after yourself, not just your bank balance

When we take care of our physical and mental health, we can make better financial decisions and manage our finances with greater confidence. Stress can cloud our judgment, leading to impulse purchase, not paying bills, or not contributing regularly to savings. Ensure you are practicing self-care like a maintaining a good work/life balance, spending time outdoors, doing adequate exercise, eating a healthy diet, and socialising to clear the mind and provide much-needed perspective.

Tune out the noise

How much attention do you pay to news stories in the media? Those that say 'stock markets have crashed', 'we can’t afford to live', or 'retirement is unaffordable'. It is worth considering whether these statements are really true for you. If they are, then seek help (we have listed some contacts below) but, if not, remember that headlines are supposed to grab attention so are often created to spook you. We’ve written more about which information you can trust here.

Financial support contacts

Ourselves – for retirement planning, cash flow planning, and investment advice**. Get in touch here.

For advice on cost of living and debt:

Only take advice from qualified experts

There’s a growing trend of people increasingly turning to social media for investment ideas, even as the Financial Conduct Authority (FCA) begins to regulate the field of finance influencers – or ‘finfluencers’ as they are often known as.  

With a variety of content at our fingertips, it’s vital to differentiate between opinion that could lead you down the wrong path, and evidence-based thinking that could benefit your financial plan. 

Whilst social media has great potential to close the financial education gap, we’d advise you to err on the side of caution when taking advice on money. The example below is case in point – it doesn’t account for personal situations or objectives and focuses largely on a short-term outlook, with little capacity for changing circumstances over the long-term. 

Not all investments will be fully protected by the FSCS (Financial Services Compensation Scheme), and unfortunately, there are some scams circulating online. 

If you are unsure of the credibility of the advice you’ve received or seen, it’s worth contacting an independent, FCA-registered financial adviser for a second opinion.

Separate your emotions from investing

Markets can be volatile and fluctuate, where you can watch your savings balance bob up and down. The stress can cause even the most seasoned investor to act out of fear. It’s natural to feel concerned about your money during these times, yet looking at the theory and evidence shows us that there is good potential for your investment to recover, perhaps even grow. Knee-jerk reactions can lead you to miss out on potential market uplift over the long-term. Ben, our Chartered Financial Adviser, has discussed this in more detail here.

Ensure you and your loved ones are protected

Insurance policies are there to provide reassurance and help you to feel more in control in case of “what if” scenarios. There are various types of cover you can put in place:

  • Life policies pay out a lump sum to your family if you were to die during the specified term.
  • Critical illness insurance pays out a lump sum if you were diagnosed with a serious illness.
  • Income protection pays out a regular income if you were incapacitated and unable to work.

These all ensure you and your loved ones can still afford to live and have a plan B in place. Not something we enjoy talking about, but is important to consider.

Protection is something we can help with at Stephen Eve Financial, find out more here. We also have a blog explaining more on protection/insurance here.

Put a financial plan in place

Meeting with a trusted financial planner/adviser can help you create a financial plan for peace of mind**. While this might appear to be the costliest on this list, in the long run, working with a financial professional will help to reduce the daily and lifelong stresses that come with managing your finances. They can help you create a budget, set financial goals and offer advice on how to appropriately manage your money. By having a professional guide you, you can feel confident in your financial decisions and reduce stress related to money management.

*Aston University report highlights links between money and mental health during the pandemic and cost of living crisis

**Colleagues at Stephen Eve Financial Planning are not trained in mental health. They can provide advice on monetary matters, however, if they feel you are vulnerable due to mental health, they will refer you to a trained professional.

This content is for information purposes and should not be treated as financial advice. We would always recommend speaking to a professional before making decisions regarding your wealth. The value of investments can fall as well as rise and you may not get back the amount originally invested. Past performance is not a guarantee of future results. Values change frequently and past performance may not be repeated. Even a long-term investment approach cannot guarantee a profit.