Wellness is a term that has become very popular in the past few years. We tend to think of it in terms of mental or physical health but it is time we looked at financial wellness.

Simply put, financial wellness is a relative measure of how well a person manages their financial life. We all want to be financially well and this article is about what it means and how you can improve your financial wellness.

When we think about health and well-being, it’s natural to consider the physical, mental, and emotional aspects but our financial situation has a huge bearing on all of these.

Some facts

The PwC Employee Financial Wellness Survey of 2022 is a useful guide and while they surveyed employees, the topics apply to just about everyone.

Q: In the past year, how much of a negative impact have financial stress/money worries had on your…

Source: 2022 PwC Employee Financial Wellness Survey, January-February 2022: base of 3,236 full-time employees

Even a decade ago, financial wellness was a topic that was rarely discussed but financial stress is on the increase and over 60% of employees say their financial stress has increased since the start of the pandemic. Not a surprise but a significant figure.

In the UK, a survey by the Money Advice Service in 2022, found that 22% of people had less than £100 in savings. Most Western expats are paid considerably more than the average UK resident but there are still a worrying number of people in the UAE, and wider GCC, who have made no provision for themselves.

What do we really mean by financial wellness?

General financial wellbeing can be summarised as:

• Being able to afford your day-to-day expenses
• The ability to manage a financial surprise
• Being on track to achieve your personal financial objectives and planning for later life
• Knowing that your family will be financially secure if you aren’t around
• Having the freedom to make financial choices

Now what can we do about improving your financial wellness? Taking some smart steps to manage your money and to plan for your future will reduce your stress

Build up an emergency fund

This really is the number one priority for everyone. Knowing that you have cash in the bank that you can access when required removes a great deal of stress.

This was brought home to many people in March and April 2020, when the pandemic hit, and jobs and income disappeared overnight.

Without cash to fall back on, your financial life will always be precarious.

A credit card is not an emergency fund.

Set yourself a monthly budget

If you are struggling to meet your monthly expenses, to save any money, or to meet your goals, you need to work out why.

Unless you really know where your money is going, you won’t be able to improve your situation.

The reality is that we all fritter away small sums that can add up to bigger sums and we all need to be a little disciplined. Unless you manage your monthly income and expenses you won’t improve your situation and reduce your worries.

Take a look at this article for guidance: Tips on reducing spending & better budgeting

Understand your spending triggers

If you are spending more money than you should, it is time to change your patterns. You need to be honest with yourself.

If online shopping is too easy, unsubscribe to those websites and unsave your credit card details.

Make it harder to buy items and you will then think twice. Wait 24 hours before buying bigger items.

If you always spend as soon as you get paid, try saving that money into a separate account as soon as it hits your account.

Pay yourself first

If you struggle to save each month, turn your thinking around. Pay yourself first.

This simply means that you move an amount of money into a separate savings account before you start spending it on other things. You can then only allow yourself to spend what is in your current account. Oh, and you don’t have to spend all the money in your bank account each month!

This way you are helping yourself. Every time you save and invest, you are buying days when you won’t need to work.

Think about your financial objectives and goals

We all want to be financially secure but have you thought about what that means for you? Do you simply want a home of your own and £20,000 a year? Maybe you would also like a holiday home and an income equivalent to £50,000 a year?

Whatever your goals, you need to put a name to them, write them down, and work out how you will achieve them.

After all, a goal without a plan is just a wish.

Once you have an idea of what you want to achieve, you can then focus on how you will achieve it. And most importantly, start doing something about it.

Dreaming is nice, but it will not sort out your financial future. And the sooner you start, the better.

Worrying about your family is major concernbut we can take some of that stress away.

If you are supporting your family, what will happen to them if you are not around? Money worries are one of the biggest causes of stress. Taking the right steps so that even if the worst happens, your family will be financially okay is the kind thing to do.

Life insurance and wills are easier and cheaper to arrange than you might think. They will make all the difference to your loved ones.

Where there’s a will, there’s a way to protect your family

Change your mindset

Having money isn’t bad. There is nothing intrinsically evil about it. You should not feel guilty about discussing your goals or wanting to save and invest to look after yourself and your family.

Money guilt or shame is not uncommon; whether it’s because you have it, you want some more, or about spending it (unless you ought to be saving it!).

Don’t feel guilty about having investments or working to earn a good income.

If you have been brought up to think that wealthy people are bad in some way, it is easy to carry that shame if you are doing well.

On the flip side, if you haven’t been saving and feel bad about that, it is never too late to change and get into good habits.

How can I help you?

Genuine financial planning is about organising your financial life, helping you to work towards your goals, protecting your family, and managing your money in the best way for you.

A financial adviser is a bit like a money doctor. We’ve seen it all before, we won’t be surprised by much, and we want to make your financial life better, to make you financially well. And we know how to do that.

Whether you need a full overhaul of your financial situation,  some guidance, to invest, to set up an offshore bank account, arrange wills, managed UK pensions, set up life and/or critical illness cover, look at your tax liabilities, buy an investment property, or to fully review your plans to ensure you will meet your goals.

Financial planning is about working with you over time to help you. Don’t confuse a real adviser with salesperson, or a so-called “financial coach”.  An independent financial adviser is very different. We are qualified and experienced professionals.

My goal is to improve your financial wellness. To improve your financial situation. As my clients can tell you, even an initial chat to start the planning process can make you feel better.

Take a look here for more:  What has a financial adviser ever done for you

 

To arrange a discussion on any aspect of your personal financial planning, please email me at keren@holbornassets.com     Serious topics but friendly conversation.

I write articles such as this one as part of the holistic personal financial planning service that I provide to expats, and the general consumer, financial and legal information that I provide in The National newspaper, and on the Facebook group British Expats Dubai.

Please take a look at the other useful articles on this website.