How to cope with financial anxiety

According to the Office for National Statistics, 66% of adults in Great Britain reported an increase in their cost of living from July to August 2023 compared to a month ago. Considering this, Paul Day has shared expert financial advice to help support individuals’ financial well-being during the cost-of-living crisis.

Talking about your finances is never going to be easy. Along with politics, sex and religion, the subject of money is often considered to be a deeply private matter – something never to be discussed in public or even among members of the same family.  

That is why so many of us remain silent, even when we’re suffering. The barriers preventing us from reaching out and asking for help when we’re experiencing financial hardship can sometimes feel simply too high to overcome. 

As we navigate this crisis, it’s important to remember that these are global issues, and they’re impacting everyone, regardless of your profession. In a whitepaper, investigating how the cost of living crisis has affected the accounting community, caba has found that a quarter (24%) of accountants who aren’t already struggling financially expect to, going into winter. Half (50%) of ICAEW members have already made changes to their spending on their energy bills, two-fifths (41%) on food and over a third (37%) on transport.   

These are worrying times, but there are steps we can all take to keep our spending under control and ensure the months ahead don’t feel quite so daunting. So, how do we ease the burden and empower people to open up about money?   

Learning how to understand your feelings and articulate them
Financial wellbeing is about control. Control over your day-to-day decisions and long-term goals. When we lose this sense of control, we find ourselves stifled, caged in, helpless. Anxious thoughts start to cross our mind, such as: Can I pay rent this month? Will I ever be able to buy my first home? Do I have enough money to support my family? Will I have enough money saved to enjoy retirement? Many of us might find ourselves worrying about these questions on a more regular basis now as the world enters a period of economic uncertainty.  

Anyone can have these feelings, regardless of income or profession. For example, Salary Finance’s UK Cost of living impact report found that money worries are affecting the same percentage of employees (26%) in banking, accounting, and professional services compared to retail and hospitality. This could be because of cash flow or debt challenges which inhibit them from saving, or personal circumstances.  

Accepting that these feelings are normal and that you are not alone is the first step towards better financial wellbeing. This will allow you to be kinder to yourself and create space for you to unravel your thoughts and anxieties. Once you have a better understanding of what you’re feeling, you should find it easier to open up and take the first steps towards better financial wellbeing.  

Take stock of your finances and create a budget
Before you reach out for help, it’s useful to have an accurate picture of your financial situation.  

Knowing your income, expenditure and disposable income once your day-to-day expenses are covered will give you confidence in your decisions and help you to create a budget. If your partner or spouse usually looks after the finances, be sure to talk the budget through with them, so that you both understand your financial situation. 

Tackling debt
The best way to get a handle on it is to split it by priority. Start by listing your debts and the different sanctions you might face as a result of who you owe. For example, if you fail to pay your energy bill, you may have your energy cut off. If you don’t pay your mortgage, you can lose your home. Tackle the debts with the most significant sanctions first. It’s easy to get distracted by lenders for overdrafts and credit cards, as they can often shout the loudest, and most frequently. But the impact of delaying payment of credit card debt is less severe than, for instance, your council tax. Prioritise based on the potential consequences. 

Take care of your mental health 
This cost of living crisis might be hanging over us for a while, so it’s important to take care of your mental health, and ensure you’re in a good frame of mind to deal with the challenges ahead. That said, if you’re trying to tackle something like debt, you should aim to look after yourself in a way that’s low-cost, or perhaps even free. A walk in the woods, for instance, costs nothing but can do wonders for your wellbeing.   

Recognise when you need help 
Right now, many in our community are struggling in silence. But whether they’re trying to implement some practical solutions themselves or want to speak with organisations that can provide advice, it’s vital that those who are struggling get the help they need. At caba, we’re receiving more calls for help, which is encouraging. However, we know there must be people out there who are struggling but aren’t reaching out.    

Whether everyday or exceptional, we all face challenges throughout our lives, and when they affect our finances, it can feel particularly overwhelming. Whatever your worries, big or small, you’re not alone. Equipping yourself with a range of tools and advice can go a long way towards supporting your everyday financial health. At caba, we are here to provide that support. 

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    6 December 2023


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