Change is a GOOD thing
Taking control of your finances can feel daunting – but it doesn’t have to be an uphill struggle. We explore how to get your finances fighting fit for the year ahead
As the saying goes, money can’t buy you happiness – but it can certainly have a negative impact on our wellbeing.
Recent data shows a striking correlation between falling behind on energy bills and increased levels of anxiety. Moreover, those struggling financially are more likely to experience dissatisfaction with life and lower happiness levels.
“Financial wellbeing is the feeling of being in control of your own financial situation,” explains Prema Sohun, financial wellbeing advocate.
Much like our health, it’s the small things that we do daily, weekly and monthly that can help us reach our financial goals over the long term. Here are four things you can do.
Give yourself a financial MOT
For many, the early months of the year are an apt time to make changes in our lives - and that often starts with money.
“Financial MOTs are a great way to dedicate time and space for you to check in on your finances,” Prema explains.
Referring to this time as a ‘money date’, she suggests, allocating time monthly and sees it as a, albeit less traditional, “act of self-care”.
During your financial MOT, the 5 areas to review are:
- Budget (weekly and monthly)
- Financial goals
- Any debt repayment plan(s)
- ‘Future You’ (savings, investments and pensions)
- Reoccurring payments (subscriptions, direct debits, standing orders and renewals).
Financial wellbeing is ongoing and can fluctuate, though.
Throughout the year there will be times when money is more stretched than usual – think summer holidays or half-term breaks. So, expect your budget to change a little as time goes by.
“It’s important to acknowledge how you feel about your finances. Ask yourself whether you’re enjoying your relationship with money and whether you need to make any changes”.
Prema Sohun, finance wellbeing advocate
Mindful spending
“Mindful spending happens when you have more of an understanding of what your ‘money story’ is and what your spending triggers are,” says Prema.
Your ‘money story’ is built up of unconscious beliefs rooted in childhood experiences with money, shaping your thoughts and behaviours around finances. These narratives influence financial decisions that steer your path toward achieving your goals.
Practicing mindful spending encourages conscious decisions and ample consideration before cash leaves our pockets.
A few ways we can integrate mindfulness into our wallets is by avoiding impulse spending and avoiding small, habitual expenses.
Instead, we can look to prioritise what it is we’d like to spend our money on – but not forgetting to reward ourselves every now and then with something we’ve saved for.
To set up a budget that’s going to actually work for you, first you need to identify your spending triggers and set a clear budget to create better habits.
“Living within your means is key, whether it's tracking expenses through budgeting apps or adhering to the 50/30/20 rule (50% of your income on bills, 30% on enjoyment and 20% into savings), adjusting it to fit your lifestyle,” says Prema.
Weekly budget
Setting up auto-payments after you get paid, including investments, savings and bills, can help keep your money goals on track.
To curb any impulse buying Prema advises “putting time between yourself and the purchase”. Consider unsubscribing from shopping emails and deleting apps from your phone to minimise temptation.
Look to incorporate ‘no spend days’ to cut down expenses, which ensures your financial health and helps you prepare for unforeseen circumstances or payments.
It’s important to remember, financial wellbeing varies for everyone – whether it's breaking the paycheck-to-paycheck cycle or gaining the freedom that money can offer.
Explore budgeting apps like Monzo or consider innovative investment apps that round up purchases.
Credit cards too, if used well, can also be a great way to strengthen our financial wellbeing. As long as you repay the full amount each month, they can offer advantages. Especially where there are extra rewards involved.
Vitality members who take out Vitality American Express Credit Card, for example, receive annual cashback on their purchases when they get active. You can find out more about how to make a credit card work for you by visiting our blog.
Bills
Enjoyment
Savings
Get thrifty
Why not also embrace the trend of shopping second-hand from platforms like Vinted, Depop and By Rotation?
These offer a spectrum of options from buying and renting to selling items, and is better for the environment, too.
Similarly, apps like Olio and Too Good To Go give access to food items that would otherwise have been discarded, promoting resourcefulness and reducing waste.
Exploring loyalty cards and offers is another great way to get discounts and ease cost.
“Consider side hustling through surveys, taking part in market research, freelancing your skills online, monetising a hobby or creating an online course,” adds Prema.
Protect yourself and your family
At Vitality, our life cover can cost as little as £5 per month (that’s less than your average weekly coffee order), with an average monthly cost of £55 per plan1.
Plus, members who add Optimiser to their life plan, can save up to 30% on their premiums when they look after their health. Vitality life insurance holders saved on average £114 each year through lower premiums2.
To find out more about a life insurance plan with Vitality, visit vitality.co.uk.
1 Vitality research into Life insurance, 2023
2 Vitality Life Claims and Benefits Report, 2022
