The 23rd March 2020 and the months that followed saw levels of unprecedented change in our lives. Coronavirus has impacted the way we work, how we interact with each other and the importance of prioritising our wellbeing, particularly mental and financial.
Despite the challenges we’ve faced, research from our inaugural Money and Mind Report suggests that the average UK adult believes they are in a relatively stable position when it comes to paying bills and saving money. However, this doesn’t equate to good financial wellbeing, with around half (48%) of UK adults admitting that they feel regularly or occasionally stressed and overwhelmed due to their financial situation.
This lays bare a stark contradiction between people feeling confident about their finances and the reality, which is that their finances are not in a great state of health. Worryingly, this is almost solely down to the fact people are failing to plan for the future and put in place protection against the unexpected.
An improvement in financial wellbeing can be activated by the simple first step of people engaging with their finances. Creating and then reviewing a financial plan can support this with our research showing that over a third (37%) of people acknowledge that having a sense of control and foresight over finances could help boost their wellbeing.
We recommend the following six steps to improve financial wellbeing:
1)Remember that it pays to talk
Some 16% of individuals said they would keep financial concerns to themselves. However financial wellbeing is ultimately achieved when you feel confident and have a clear understanding of your financial priorities. The first step is awareness - you should then be able to identify any areas where change is needed and who you may need to seek support and guidance from.
2)Plan for the future
One benefit of financial planning is achieving a detailed understanding of your finances now and creating a future plan. When you have a clear financial plan, it gives you a path to work towards and you may feel a stronger sense of financial stability.
3)Seek guidance from a professional
Financial advice can provide peace of mind that you are addressing the needs of you and your family. Good financial planning is not just about solving problems. It is about working together with your adviser to set goals and then create a plan to help you achieve them. This also doesn’t have to be a huge time commitment.
4)Know the value of advice
Only a quarter (24%) of people would talk to a financial adviser if they had money worries. Knowledge and understanding are very powerful and studies show taking financial advice can help wealth grow at a faster pace.
5)Think big picture
Financial wellbeing cannot be looked at in isolation. Having a good level of financial wellbeing and feeling confident about your finances underpins all the other elements - they go hand in hand.
6)Tailor-make your wellbeing
Understanding what’s important to you and your current situation are the cornerstones for creating a financial plan. Identifying the things that will bring you happiness and putting a plan in place to achieve them should be the end goal.
Head of Business Development
Schroders Personal Wealth
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