Financial planning and well-being
Financial planning and wellbeing
There is an old Chinese saying, "may you live in interesting times." The thing is, it's meant as a curse, not a blessing. We live in interesting times today for sure, and there are many challenges at hand to navigate financially, from inflation to high-interest rates to volatile financial markets, health concerns, and job security. It's no wonder many people feel concerned about their finances and the future.
With these generalized anxieties and much higher costs associated with simply maintaining standards of living, it’s easy to see why people feel powerless and frustrated.
Research from Price Waterhouse Cooper found that 58% of people cite financial issues as their top cause of stress, while Aviva found that 38% of generation X were kept up at night by their finances. A shocking 86% of people say that their mental health issues are made worse by thinking about money.
Research from PWC found that 58% of people cite financial issues as their top cause of stress, while Aviva found that 38% of generation X were kept up at night by their finances. A shocking 86% of people say that their mental health issues are made worse by thinking about money.
So, what can be done?
Could financial planning hold the answer?
Believe it or not, financial planning not only helps us achieve our financial goals but can also improve our mental and emotional well-being.
One of the key benefits of financial planning is that it helps us to feel more in control of our finances. When we have a clear plan in place, we can better manage our money and make informed decisions about how to spend and save it. This can reduce stress and anxiety around money, which can positively impact our mental health.
Another benefit of financial planning is that it can help us to achieve financial momentum. Whether it’s saving for a down payment on a house, building an emergency fund, or planning for retirement, having a financial plan in place can help us make progress toward our goals. This sense of accomplishment can boost our confidence and self-esteem, which are important for our overall well-being.
In addition to the mental and emotional benefits of financial planning, it can positively impact our physical health. Financial stress can cause a range of physical symptoms, such as headaches, stomach problems, and high blood pressure. By reducing financial stress through effective financial planning, we can also improve our physical health and overall well-being.
We’ve seen this for ourselves.
As financial advisors, we get to witness first-hand the positive effects of seeing people take control of their finances. The stats also back this up.
Royal London conducted research on the links between receiving financial advice and well-being. They found that those who had received financial advice:
- Felt more in control of their finances
- Felt more financially secure and stable
- Felt better prepared to cope with shocks
- Worried less about their finances for retirement
- Felt less anxious about their household finances
- Felt more confident about the future
Crucially, they also found that these benefits were greater if people regularly worked with their financial adviser over a long period. This is due to the close, trusting relationship that develops when working with a financial adviser, meaning people feel reassured that their money is being looked after properly.
Financial advice can help everyone.
Society is slowly but surely breaking down the taboos around mental health and many areas of life, yet the links between finances and well-being remain in the shadows.
People avoid tackling their finances for many reasons. Some feel it’s all just too confusing, while others feel it’s too deeply personal. But it doesn’t have to be that way.
If you need dietary advice, you speak to a dietician. If you want to improve your fitness, you engage a personal trainer. If you’re stressed and want to get things off your chest, you speak to a therapist. Financial issues should be no different.
Ignoring the issue might be easier, but can leave you with a distinct feeling that your finances are like a sitting duck, open to attack from economic shocks.
In contrast, being proactive and having a financial plan in place will mean that no matter what comes your way, you will feel safe knowing you have a game plan for dealing with it.
Our financial health and personal well-being are tightly bound together, with money worries often spilling over into other areas of our lives. It’s therefore well worth remembering the benefits ongoing financial planning can bring.
So, think again if you’re thinking about coming to that planning review! It may bring you more peace of mind than you realize.
And feel free to share this post with anyone you think could benefit from speaking to someone about their money.