To celebrate World Mental Health Day 2023, we’re looking at the mental health benefits of forming good financial habits.

Taking place on October 10th, World Mental Health Day 2023 is all about raising awareness of mental health and driving positive change for the benefit of everyone.

Something most people worry about at one time or another is money and there are likely to be more of us worrying about it than usual at the moment as a result of the ongoing cost of living crisis.

Luckily, research shows that taking small steps – like saving a small amount of money each month – can have a positive impact on both your financial wellbeing and your mental health. Here’s everything you need to know.

What is financial wellbeing?

Financial wellbeing is all about people’s relationships with money, the control they have over their own finances and their ability to strike the right balance between having enough money to pay the bills and enough to spend on things they enjoy, both now and in the future.

Financial wellbeing goes beyond simply earning or being able to save lots of money – in fact, recent research suggests that people in the top wage bracket are less content with their lives than those with good financial wellbeing.

Why is financial wellbeing important?

As well as being important for financial reasons, financial wellbeing is also important for our mental health. People with poor financial wellbeing often suffer from stress and anxiety, and are at an increased risk of becoming isolated. Furthermore, employees with financial concerns are more than twice as likely to suffer from reduced productivity and/or absenteeism at work than those with good financial wellbeing.

Conversely, people with good financial wellbeing are less stressed about money, which has a positive effect on their overall health and can help improve their relationships.

How to manage and improve your financial wellbeing

Establishing good financial habits is easier said than done but these tips will help you on your way:

• Plan your spending: From essentials like utility bills to treats like holidays, learning to budget will improve your financial wellbeing by allowing you to take control of where you need and want to spend your money. Try to make time each time you get paid and draw up a budget for the coming weeks. If you need a hand, give this budget planner from Money Saving Expert a go.
• Keep track of your spending: Once you’ve created a budget, you need to stick to it. Monitor your spending to help keep it under control and identify any areas where you could reduce your outgoings.
• Save money where you can: The key to saving is to do it little and often so try to save on a weekly or monthly basis to help you cover your costs. A good idea is to set money aside every time you get paid and try to make it a regular habit. Setting yourself financial goals is a great way to stay motivated.
• Shop around for the best deals on things like insurance or phone contracts: You can save a significant amount of money by doing some research and shopping around, so review all your Direct Debits once a year and see where you could make savings. There are plenty of online comparison sites that can help.
• Plan for the future: Simply put, the more you can set aside now, the more flexibility you’ll have in future, so start putting money aside in a savings account for your future as soon as possible. Another great idea is to regularly contribute to a pension fund, so enquire if your workplace provides one asap. The sooner you start, the better – even small amounts make a big difference over time. So set aside what you can and try to increase your contributions over time.

How Leeds Credit Union can help

As a credit union, we don’t have external shareholders or investors, so it’s our members who come first, not profits.

We offer a variety of savings accounts and loans to help our members improve their financial circumstances, while our Money and Budgeting Service (MABS) is also available to members who meet certain criteria. To find out how we can help you increase your financial wellbeing, click here.