When we think of wellbeing, we usually think physically and mentally but there is another important aspect to add to the mix, financial wellbeing.
Financial wellbeing is a term used to describe our ability to confidently manage our money, how prepared we are for the unexpected, and how we can save and plan for the future. It is an aspect of wellbeing that is often overlooked, but financial wellness can dramatically impact our quality of life.
Financial difficulties can impact anyone including accountants. Here we look at financial wellbeing, its impacts on our mental health, and how we can improve our financial wellbeing.
Financial Wellbeing and Mental Health
With the current economic factors at play, financial worries are a main concern for the vast majority of the population and financial worries can have a major impact on our mental health. While it is true money can’t buy happiness, multiple studies around the world show that finances are one of the most common causes of stress and anxiety, which can impact our health, work, relationships, and many other aspects of our life.
According to research conducted by PWC in 2023, almost half of Irish consumers are concerned about their personal financial situation. A national survey carried out by Aware found that financial worries were the number one cause of concern with 57% stating it was impacting their mental health.
Laya healthcare’s workplace wellbeing index found that of the one in four people who reported poor mental health, two-thirds cited financial concerns as the cause, more than any other problem. These few figures highlight just how prevalent financial concerns are and how much of a toll they can take on our mental health.
Feeling anxious, experiencing low mood, or losing sleep if you are struggling to control your finances is a totally normal response but in the long term can have a devastating impact on our lives, even fuelling and escalating our financial trouble.
How to invest in your financial wellbeing
If you want to ease money worries or simply want to feel more in control of your finances, there are thankfully many simple and easy ways to do just that.
Spending sprees
The first step is to look at your current spending habits and identify just where your money is going. By reviewing your bank and credit card statements, you can tally your outgoings and expenses. Categorise the type of spend into different groups, this can help you identify areas where you may be overspending and where you can make changes.
We can all overspend sometimes or have weeks that are more expensive, but when it becomes a habit, it can be hard to break. By tracking your expenses, you can get a better overall picture of your spending habits and triggers.
Money aspirations
Write down your financial goals and consider what you want to achieve in the short and long term, this could be clearing off a credit card, buying a house or building a rainy-day fund.
Having financial goals give you a clear objective to work towards and can help keep you motivated to save and stay on track.
Budget
Creating a monthly budget is a surefire way of getting control of your finances. Figure out the amount that goes on your essentials expenses and then budget for the week and month ahead.
For help with this, there is a wealth of free online budgeting tools and templates at your disposal.
In debt to you
Once your budget is going to plan, if you have accrued any debt now is the time to begin clearing it. Sort your debt from the highest interest rate to the lowest interest rate and use any extra cash to begin clearing off these debts, starting with the higher interest rate and continue moving your way down the rates.
Saving grace
It can feel like any money you earn is eaten up by expenses and there is simply no money left for saving. Even when money is tight, it is important to begin setting money aside for the future.
If you don’t already, set up a savings account and transfer any remaining money over at the end of the month. Even if it is just small change.
Or another approach, termed ‘paying yourself first’ is set up an automatic transfer of money into your savings account as soon as you get paid.
Seek advice
If financial troubles persist despite your best efforts, you may consider seeking external financial advice. A financial advisor can view all aspects of your financial wellbeing with you and identify areas and aspects where you can make changes.
Supports available to you
A common preconceive notion is that financial professionals should be in good financial health due to their professional background. However, like anyone in society, accountants from all walks of life can struggle with poor financial wellbeing for a multitude of reasons.
From the work of CA Support, we see the causes and impact financial difficulties have on chartered accountants. Perhaps a period of illness, unemployment or upheaval has created a financial burden and we know financial problems can often deteriorate quickly.
If you are struggling with financial difficulties, CA Support provides emergency assistance to Institute members, students and families experiencing turmoil. Or if you are in a healthier position, you may consider donating to CA Support to help support members and families in our community who are less fortunate.
Improving your financial wellbeing can take time and effort but by building small and healthy habits, you can alleviate money-related stress and anxiety. However, if you are struggling with any emotional toll, the Thrive wellbeing team is also here to help.
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