How financial planning fuels your wellbeing
This content is for information purposes only and should not be taken as financial advice. Every effort has been made to ensure the information is correct and up-to-date at the time of writing. For personalised and regulated advice regarding your situation, please consult an independent financial adviser here at Castlegate in Grantham, Lincolnshire or other local offices.
Financial planning is objectively beneficial for your wealth and finances. Yet what about your mental wellbeing? Increasingly, studies demonstrate a key link between money and mind. How can you ensure that your financial plan is improving your peace of mind and reducing stress?
Below, our Grantham team at Castlegate highlights how financial planning interlinks with wellbeing (especially mental health), offering ideas on how to foster a more positive relationship between the two.
We hope this summary is helpful to you. To discuss your financial plan with us, please get in touch to arrange a no-obligation financial consultation, at our expense:
01476 855 585
info@casfin.co.uk
How finances link to wellbeing
Your money can affect your mental health – and vice versa. For example, if you feel generally depressed or anxious, then you may be less motivated to organise your finances. Also, a lack of financial control can create (or exacerbate) depression and stress.
The interrelationship is not just negative, however. It can also be positive. For instance, a generally happy person may experience a greater sense of self-motivation – leading them to take the initiative to sort out money problems. Moreover, organising your finances can lead to feelings of empowerment and happiness as you feel more in control of your money.
Some people might get a brief “high” from spending money. This can lead to retail therapy behaviour to try and feel better. However, the high soon dissipates and often results in regret or further anxiety afterwards – particularly if you overspend and run into credit.
People with mental health struggles might engage in avoidance behaviours, such as not opening important tax correspondence or bills. These struggles can also lead to people not showing up to work or underperforming – worsening their income, confidence and prospects.
The good news is that people do not have to feel trapped in their money problems. A robust financial plan can go a long way to reduce, or even alleviate, many wellbeing issues – putting you back in control and moving you towards your goals.
Financial planning & wellbeing
A key part of the financial planning process is to take clear stock of your current position. This includes a thorough survey of your income, expenses, assets and liabilities. Knowing where you stand is tremendously empowering – even if the picture may not look as good as you would like.
Once you know where you stand, you can start to identify key steps which can improve the situation. For instance, perhaps you notice that you are paying for multiple digital subscriptions each month which you hardly use.
Stopping them could immediately free up more income. Perhaps this could then be used to reduce some outstanding debts. This, in turn, results in more free income the following month (since you are paying less interest).
Turning to assets and liabilities, maybe you notice that you are paying quite a high interest rate on your mortgage. After seeking professional advice, it transpires that you could find a better fixed-rate deal elsewhere on the market. By remortgaging, therefore, you could improve your net worth by reducing your liabilities.
Following steps like these can feel very rewarding. You feel like you are keeping more of your hard-earned money and building your wealth. It creates a sense that you have financial control and are not merely a victim of wider circumstances.
Building protection & progress
Another area to consider is your protection plan. Many people are troubled by fears about “what might happen” – e.g. premature death or serious illness, which could leave their loved ones financially vulnerable. Here, a financial plan can build peace of mind by including protection.
Some key protection “pillars” to consider include life insurance, income protection, critical illness cover and private medical insurance (PMI). A robust set of policies can help your household maintain financial stability if the worst happens – also reducing stress and worry, since you know that you are prepared for such scenarios.
It is important to not just focus on your short-term finances, however. Consider the future and where you want to be in 10, 20 or 30 years’ time. What might retirement look like for you? What kind of legacy do you want to leave for your loved ones?
Having a long-term financial plan is even more empowering since it helps you feel like you are moving through life with a greater sense of purpose. You are not just living in the day-to-day; you have a greater vision which you are building towards.
A strong pension strategy is often useful in this respect. For instance, it promotes feelings of confidence and security if you know that you have the right investment strategy for your needs and that your pension contributions are at the appropriate level.
Conclusion & invitation
Financial planning can have many tangible benefits. Not only can it help to improve your financial position, in real terms, but it can help with mental health (e.g. reducing stress) and even your physical health – possibly contributing to better blood pressure and heart health.
If you are interested in discussing your own financial plan or investment strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:
01476 855 585
info@casfin.co.uk
