Five ways to change your financial future:
- Be aware of your finances. We often meet people who suddenly realise that they took their eye off the financial ball. When this happens, the impact of an unexpected situation can be much more intense, because there are money issues on top of a very stressful situation. It might be something minor like a boiler breakdown, or more major like a relationship breakdown or an unexpected illness. Being aware of your financial position doesn’t magically mean you’ll have more money but financial foresight can ease painful processes. For example, know what funds you have access to, keeping relevant paperwork in a safe and accessible place.
- Prepare and protect yourself. This links to other things you can do to change your financial future, such as having financial foresight. Our research shows that saving for a rainy day is a top money goal for households – they want to save whenever possible. But many people are under pressure here, as product prices have risen faster than wages. However, making tiny financial adjustments can prepare you for known events (such as special occasions) as well as unexpected problems. The prepare and protect mindset can bring peace of mind as well as boost your savings pot. There are a number of financial products that let you round up your small change – spare pennies – which can be a simple way to save as you go about everyday life.
- Talk about money. Like many things in life, talking to others can bring new perspectives and resolve niggling worries. Not just when things go wrong – getting tips and hints on anything and everything that matters is helpful. We sometimes meet people who find it very hard to talk about money with their loved ones. Younger generations seem to be less worried about opening-up on finances (such as debt problems or salary issues) than older ones; this is a good thing, because talking about money is important. Finding a money mate – someone you’re comfortable chatting with – can really help you focus on money goals you both want to achieve.
- Think ahead. This may sound like an obvious strategy if you want to change your financial future. However, our research shows that over half of the UK population plan their lives only days or weeks ahead. Modern life is very immediate, and it’s easier to be impatient about the big picture now we can get so many other things instantly at our fingertips. However, if you envisage specific things in the years ahead, you’ll need to put a series of practical steps in place to get there. Don’t just imagine your future, invest in it – both time and money – to make it a reality. It’s hard to imagine the very far distant future, decades away, so try focusing on a 5-10 year plan to start with, but with an eye on your long-term mission.
- Build a budget. Many money worries arise either from a failure to think about long-term financial needs or from unexpected events. One way to keep a lid on financial pressures is to build a basic financial plan and review it from time to time. Making a simple budget can identify sources of financial stress that could have an impact on your mental or financial wellbeing. Worrying about money can be a cause of anxiety and if not addressed quickly, it can spiral out of control. When a financial situation feels out of control it is important to seek help. Talking about money problems with someone impartial can sometimes relieve money stress. Many organisations offer free guidance and support in the UK, including the Money Advice Service and Citizens Advice.