The Mental Health Benefits of Forming Good Financial Habits.

Taking place from May 13th, Mental Health Awareness Week is an annual event designed to promote mental wellbeing, reduce stigma and encourage open conversations about mental health.

But did you know that 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? 

Read on to find out more!

What is financial wellbeing?

Financial wellbeing isn’t about earning or being able to save lots of money, it’s 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.

Why is it 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.

On the other hand, 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. 
• 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.

Need a helping hand?

At Leeds Credit Union, we offer a Money and Budgeting Service (MABS) that can help you to budget more effectively and ensure your bills are paid on time. For more information, please click here!