An introduction to money management

Everyone wants to make their money go further. Setting up a budget, staying on top of your bills and living within your means – it can all pay off. It’s a good feeling being in control of your finances. And managing money is a skill we should all have – but it’s often something we’re not taught at school. For most of us, we learn as we go, and this could involve a few costly mistakes.

Financial pressures can affect all of us. We’ve all reached the end of the month struggling to make ends meet. But without action, it’s easy for bad habits to form and problems to snowball. The link between money and mental health or wellbeing is a complex one.

Worrying about money can make our mental health worse, but poor mental wellbeing can also make it harder to manage finances. It can affect people in different ways, but starting to understand your behaviour can help you make responsible choices.

Key money worries

Recent research found that seven million Australians can’t sleep at night because of financial concerns. Around 40% of those asked were struggling to sleep soundly because of money worries, and more than 60% admitted to regularly feeling ‘hot’ and ‘stressed’ about their bank accounts.

It’s likely certain worries are shared by most people – for example, more than half were most concerned about household bills and funding day-to-day living. Other concerns seemed to depend on the age of those asked. The research found the most stressed group of Australians were aged between 35 and 54, something which they put down to the group being more likely to face peak mortgage debt, potentially due to upsizing to accommodate a growing family, and juggling careers and raising families.

Similar results have been found around the world. UK research, released to coincide with World Mental Health Day 2019, said many of the people who worry about money struggle to sleep soundly at night (32%). It found that 9.5 million UK adults have suffered from mental health issues as a result of financial anxiety.

For the younger generations (aged 18 to 24), worries were largely focused on the following:

33% Paying off student debts
48% Paying for a house

9.5 million UK adults have suffered from mental health issues as a result of financial anxiety.

How younger people behave as a result of these worries varies. 11% are so preoccupied with their finances that they check their balance several times a day. Others (18%) only check their account every few weeks – perhaps out of fear. The Aussie research, from online financial services company Spaceship, actually gaive this a name. “We call it FOFO, or Fear of Finding Out your bank balance.”

Whatever stage of life you’re at, money worries can affect you.

Talking about money and mental wellbeings.

For many people, talking about money is difficult. It’s a bit of a taboo subject. Almost a third of Australians never talk about money – with anyone. The research analysed almost 3,300 adults and found that embarrassment or the fear of being judged is a major reason why people keep quiet.

Baby Boomers are the generation least likely to engage in money talk, with younger generations being slightly more comfortable talking about the topic. The study developer, Patrycja Slawuta, explained that “money is more than just a number for most people. Our relationship with money is emotional, complex and personal and is influenced by many things.”

While society has made some great breakthroughs in discussing topics like mental health more openly, it seems there’s still some way to go with other issues.

If you avoid speaking about your finances, it can have a detrimental effect on your mental health. We’ve already discussed how many people struggle with sleeping. But it can also make life tricky for those around you – for example, if you have joint accounts or both you and your partner’s name are on the bills. Making mistakes could impact their credit rating.

But talking about it could make a difference. If you’re serious about a secure financial future, it’s important to open up the conversation. Many people have similar worries about money, so no-one is alone.

Talking about it can help everyone involved by breaking down the taboos, aiding understanding and even helping to find solutions to common problems. As Slawuta says:

The more people talk about money, the more motivated they are to learn about money and their financial behaviour to improve their situation and gain confidence.

Tips for having difficult conversations about money

Be wary of the emotions involved

It’s easy to get emotional when talking about things you find stressful. But some emotions might get in the way of making progress with the conversation. Make sure you give yourself time to address your feelings and have the conversation at the right time.

Appreciate that conversations are two-way

Once you’re ready, you might have a lot to get off your chest. But it’s important both people have time to speak uninterrupted. It might seem a little unconventional for a conversation with someone you speak to so often, but you could set some guidelines at the start. It’ll make sure everyone gets to speak. Just remember to stick to the topic.

Avoid judgements

Think before you speak or react (facial expressions can be judgmental too). Make sure you don’t make accusations, but instead focus on what you think and feel.

For most people, these conversations will happen with friends and family. If you can’t talk, or don’t feel comfortable talking to your family or a friend, consider talking to the following people:

  • A health professional
  • Mental health charities
  • Student services if you’re in education
  • Peer support (groups of people using their own experiences to help each other e.g. support groups or online communities)

Why you need to manage your money

Recognising when you or someone else needs support isn’t easy. But Money Advice Service suggest there are things people do which suggest there could be a problem.

If you’re worrying about whether your financial decisions may be linked to how you’re feeling, ask yourself:

  • To make yourself feel better, do you spend large amounts of money on things you don’t really need?
  • Do you have gaps in time where you can’t earn because you must take time off work, or can’t work due to poor mental health or wellbeing?
  • Do you avoid opening post that contains bills or bank statements, or avoid checking them online?
  • Do you avoid face-to-face or phone conversations about money?
  • Do you worry about making day-to-day financial decisions?
  • Do you still worry about spending and debt, even if you’ve got enough money?
  • Do you struggle with concentrating when faced with money matters, or find it difficult to take in all the information you need to make financial decisions?

You can also use these questions to spot signs that someone else’s financial decisions may be linked to mental health or wellbeing.

These behaviours don’t necessarily mean someone has a financial problem. But over time, they could lead you to lose control of your money. Working on the relationship between financial choices and wellbeing can prevent that.

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