At the beginning of 2017, most of us would have set goals for ourselves; lose a few pounds, stop smoking, say no to your ex when they message at 5am for a ‘catch-up’ and maybe even get out of debt and save a bit of money. But now it’s the end of the year, most of us will have found that we are still stuck in those old habits, especially financial ones (and you definitely didn’t quite get round to deleting your ex’s number, did you?).
According to mental health charity, Mind, a stressful relationship with money can be cyclic. Feeling worried about our bank balance causes our mental health to suffer, and in turn, poor mental health makes it harder for us to make good decisions with money. So here are a few thoughts on how to tackle your financial stress so you can start the new year well.
Evaluate how you live
A friend of mine was in two grand of debt and he physically couldn’t understand why. He was on a decent wage and to be honest, he didn’t live a flashy life. But when he took stock of his daily spending, he found that each morning he would buy a coffee from a local shop, he never made his own lunch and he’d take an uber for trips that would have only been a 20 minute walk (lazy shit). He also paid for a gym membership that he didn’t use. Sound familiar? For a week, write down everything you spend and you’ll see where you are pissing away money.
Understand the burn
In business, the burn rate is how much of your money you ‘burn’ through each month and according to The Balance, “it’s a key measure of sustainability”. In your everyday life, the burn rate can be anything you have to spend in order to live, such as your rent and bills. These sorts of things are your real necessities (it breaks my heart to say this but alcohol and ASOS are not) and your cash must be allocated to these before anything else. So calculate your ‘burn’ and what you have left over can be saved or spent on things you want.
Anticipate the unexpected
The problem with rigid budgets is that when things unexpectedly crop up that you need to pay for, you feel even more stressed when you have to give away money. Sometimes your bills are slightly more, or occasionally you have to spend more than you wanted to on a birthday present. That’s just how life works, unfortunately. So when you make a budget, leave about £10-£20 extra each month for the costs you can’t predict.
And if you need a little help with budgeting, then download Loot here. The app lets you set weekly budgets, keep track of your spending and use your contactless card abroad without paying extra fees. (Find out more here.)
Swearing to pay off all your student debt in a year or vowing to save a few thousand pounds before the summer is very ambitious. Once you’ve calculated your ‘burn’ (remember?) if what you want to save is greater than what’s left over, then you’ve already set yourself up to fail. Be honest with yourself, you can’t shit an extra few hundred pounds so be realistic and set financial goals that you have a chance of reaching.
Get a grip of stress
My dad once told me, (okay he says this to me on a regular basis to be honest) that stress is one of the most useless emotions. Stress, really, is the negative emotion we feel in reaction to an event or situation based on fear and worry. Some people may thrive off being under pressure but it’s not the same as being under stress.
If you are feeling really shit about money at the moment and the stress is affecting you, then tell someone- get it out in the open and admit the issue. Then, think of just one thing that you can do right now that will help the situation, be it dividing the money you have or cancelling drinks tomorrow night because you can’t afford it. Once you’ve done this, make a cup of tea and go back over the steps in this article. I know you might feel shit right now, but 2018 is your year and if you get a grip financially, it will get better. You’ve got this.