How your finances affect your health
How we handle money affects our mental well-being and can affect our physical health. Studies in the UK by yourmoney.com show that 40% of 25-34 year olds who are dealing with major financial decisions such as buying a house or planning a family regularly have trouble sleeping. Data from the US shows that people with more than two financial concerns (e.g., pension and paying tuition) are far more likely to have serious mental health problems than those with, say, just one money concern.
Women are often more affected by such concerns than men. According to moneyfacts.co.uk more than half of students in England worry that money worries will affect their mental health. They also noted impairments in their eating habits (53%), social life (79%), grades (35%) and sleep (41%). A study by Mercer Management in the workplace confirms that this does not only affect young people: on average employees spend of 13 hours per month with financial worries.
Being lazy is ok! (after you set up the basics:-)
A good “money hygiene” can help you reduce stress and contribute to your well-being. It is often not the big shots and highly complex financial products, but very simple things that make the difference. Unlike fitness, however, you don't have to overcome your weaker self every day for your money hygiene.
The beginning of the year is the best time to set yourself up for the financial year. And as many things can be automated, you'll only need to invest a little time now, then can relax for a while as your finances run on autopilot.
5 tips for your money hygiene at the start of the year
❣️ Tackle the 3 biggest cost items that you can influence yourself: you want to save? Then saving on small expenses certainly helps, but you get the most out of your effort when you change the largest positions in your budget that you can influence yourself. Have a look where your money went last year and see if you have savings potential. Great candidates are rent, insurance, energy, transportation, utility costs, impulse purchases, subscriptions, etc.
❣️ Automate where you can: set up and check standing orders for taxes, pensions, health insurance, ISA provisions, pension funds etc. now. The easiest way is still to auto-deduct the respective amounts each month.
❣️ Check your bank and financial product charges and don't be afraid to switch: these costs often remain overlooked. Check how much you are paying in your bank statements and see if there are more economic alternatives. This can save you a lot of money in the long run without it hurting. You can find good provider comparisons on e.g. on moneysavingexpert.com. Switching providers is now is easy and can save you a lot of money in the long run.
❣️ Set up an achievement diary: this may sound strange, but is in fact super practical. An "achievement diary" is a notebook or piece of paper where you write down what you have achieved at work every month. Why does this help? During the annual evaluations, you often only remember the things you did in the short term. Your notes will help you to save time, help in an interim raise or serve as practical examples in job interviews. A very personal motivational boost included 😉
❣️ Book financial planning sessions with self now: much of the uncertainty around money comes from not knowing what to expect or what your situation looks like. Planning a money cleaning day twice a year helps you to structure your thoughts and documents. It works best if you combine it with things that have to happen anyway, e.g. filling out the tax return. This saves you time because the activities fit together and you clear your head because the action is already planned.
The little difference
Set yourself motivating goals, but achievable goals and strive for 80% done instead of 100% perfection never completed.
You only have time to check your budget every 6 months? The do it every 6 months. Instead of spending hours trying to find the best budget app, an Excel spreadsheet will do the trick. Are you afraid of making mistakes when investing? Start with 10 CHF to gain experience. Your safety pot of 3 monthly salaries seems impossible? Break it down into smaller goals that you automatically save each month. You don't have to be a financial expert, it's the sum of all the small steps that makes the big difference over time!
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