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Money worries can be stressful. According to the mental health charity Mind, mental health and money are often linked. Managing your money isn’t always easy, which is why it’s important to do what you can to improve your financial wellbeing.

Developing financial wellbeing means taking responsibility for your finances and developing a healthier relationship with money. If you’re serious about improving your financial wellbeing, the following tips could help you to achieve it.

1. Understand your finances

The first step towards achieving financial wellbeing is to understand exactly what your current situation is. If you’re the type of person who has no idea what’s in their bank account or dreads checking their balance, then it’s time to change your habits. Once you have a clearer picture of your current financial situation, you can start making some changes. You might surprise yourself with how much you’re spending, shocking you into some serious behaviour changes.

2. Scrutinise your spending

Now is the time to take a long, hard look at your statements. What are your biggest outgoings? Is your rent sky-high? Scrutinising your outgoings could help you identify some areas for change. You might need to consider moving to a more affordable home or swapping for a cheaper car to help you free up more of your money. Try to live a lifestyle that’s within your means, it’ll be much more freeing and you’ll find it easier to save and get a grip on your finances.

3. Start with a small goal

A small savings goal can help you to get into the habit of saving – helping you to achieve something without having to make drastic changes to your spending habits. Having a goal like a holiday or some new shoes can help you experience the satisfaction of successfully saving and show you that it’s worth it. Once you’ve achieved your first small savings target, you can start building your way up to achieving other savings targets.

4. Use money management tools

Managing your money can be tough, especially if you’re used to spending as you please and dealing with the consequences later. There are some fantastic financial apps on the market that will help you to manage your money through saving, investing and even reducing your spending. They can help you budget so that you can free up money to save more, clear your debts and develop better money habits.

5. Save automatically

When your pay comes in, it’s easy to fritter it away on different things – but as you’ll notice with your direct debits, once the money’s been taken out, it’s gone. You can take the same approach to saving as you do paying your bills by setting up a standing order to take the money out automatically on pay day. That way, you won’t have to consciously think about saving and it’ll be taken care of for you. This is a much better approach than seeing what’s left at the end of the month. You’ll be surprised at how quickly your savings add up too.

6. Reduce your spending

Now that you’ve got savings and a budget planner, you can look for ways to cut your spending. There are so many ways that you can save money without having to give up the things that you like. Easy areas to make savings include your food shopping, going out costs, clothes shopping and travel. By swapping the frivolous for the frugal, you’ll find that your money will stretch further each month, allowing you to put more money into your savings.

Thinking about your spending in more detail will also stop you from making purchases which might not be the most sensible. Spending a large portion of your wages on clothes or electronics probably isn’t the best use of your hard-earned money and instead you might want to think about spending it on experiences instead. It’s been shown in many studies that those who spend on experiences rather than material goods are happier, providing you with things to look forward to that will make saving much less of a chore.

Want a fun financial challenge? Try going one day a week where you don’t spend anything – it’s amazing how much your money will start to add up once you start making your own lunch, giving up the takeaway coffee and buying on-the-go snacks in the afternoon!

7. Learn to prepare for emergencies

While much of your previous financial history might have been focused on the now, to achieve financial wellbeing, you need to focus on the future. Could you afford car repairs if you were to have a break down tomorrow? And what would happen if you needed to replace your boiler? Being able to prepare for financial emergencies through your savings shows that you’re taking responsibility for your future. Start a separate savings account that can provide a cushion for life’s unexpected emergencies. Sick pay insurance falls into this category too and can help protect your family from a loss of income should you get ill and find yourself unable to work.

8. Seek help if you’re concerned about your financial wellbeing

The effects of debt and poor finances can have a significant impact on your health. Student loans, for example, have had an effect on mental health and long term finances for many years after graduation, which is why it’s important to achieve financial wellbeing as soon as possible.

If you’re concerned about your financial wellbeing, to the point where it’s keeping you up at night or making you unwell – it’s time to do something about it. Getting help through a debt management programme can give you breathing space to pay off your debts and get your finances back on track. Your problems may not be as bad as they appear, and with some expert help you can make it out the other end.

Achieving financial wellbeing comes with a number of health benefits, including:

  • Better sleep quality by not being kept up worrying about money
  • Reduced stress levels
  • Not having to take time off work due to illness caused by stress – ensuring you can continue to earn money
  • Feeling more positive and able to enjoy other parts of your life.

Good financial wellbeing will allow you to enjoy healthy finances both now and in the future. It will also help teach your children about how to approach money in a healthy way too. For help with the things that are out of your control, ESMI’s insurance policies are there to help. Make sure you’re covered to secure your future.

Want further information on improving your financial wellbeing? Take a look at our financial wellbeing article on 10 steps to getting your finances in order.