‘I’m really sorry, but I’m going to have to cancel. I’ve already overspent and we’re only halfway through the month!’
This is one of those phrases that I either utter, or hear uttered, at least once per month.
Coming out of university last year, one of the things I’ve found hardest to get to grips with is keeping my finances under control.
I make sure I pay my bills and, after saving what I can, I make a monthly budget for what’s leftover, including for food and fun.
But no matter how hard I try, that last week of the month is always so tight.
It’s not just me: according to research by Lloyds Bank, one in five Brits (22%) realise when they do check their bank statement, they have often spent more money than expected.
This number rises to a third (32%) when asking 18 to 24-year-olds.
Often, this unexpected expenditure has gone towards grocery shopping (60%), eating and drinking out (42%) and buying gifts (30%).
So it comes as no shock that financial wellbeing (57%) is more important to Brits than physical (53%), intellectual (39%), or social (30%) wellbeing.
But what is financial wellbeing – and what’s holding us back?
According to financial coach and ‘money whisperer’ Emma Maslin, it’s made up of four key pillars.
The first is ‘about having a great relationship with money and a positive mindset around the role that money plays in your life,’ Emma tells Metro.co.uk.
‘What I mean by this is the emotional connection that we have with money; this is the piece of the puzzle that many people are missing.
‘Even when people focus on the practical side of money, they very often haven’t got control of their emotional relationship with money.
‘A lot of our behaviour around money is driven by emotions, such as shame, guilt, and fear, all of which are very powerful, and until you have understood this, much of the practical stuff will fall by the wayside. For example, this is why we see people making budgets and not sticking to them.’
The second pillar, Emma says, is feeling in control of your day-to-day finances: ‘This means having the frameworks and systems in place to be able to keep control of what you’re spending and ensuring that you spend less than you earn and live within your means.’
Enter, Pillar Three: having a clear financial plan.
‘Few people tend to think about financial plans,’ Emma says. ‘But having a plan gives you clarity and defines the actions that you need to take to make sure that plan happens.’
The fourth and final pillar is ‘having the ability to withstand financial shock’.
‘This is where emergency funds and insurance come in,’ says Emma. ‘Having the ability to cushion the unexpected is what enables us to operate without anxiety and panic and be able to carry on relatively normally if something unexpected happens.
‘When we have these four pillars in place, we have the freedom to make choices which allow us to enjoy life and this is really what financial wellbeing is for me.’
Still feeling a little lost? Emma has shared her five tips for cultivating financial wellbeing in our lives:
Tune into your self-talk
‘We often have the harshest financial conversations with ourselves – listen to this voice inside your head and learn to practice acceptance of your current reality without being critical.’
Bring a level of awareness to your finances
‘Being cognisant of what else you need to build into a better financial wellbeing routine is a critical first step.
‘For many people, this might just mean a daily check-in with your current account. Awareness is the first step to positive and meaningful change.’
Find someone who keeps you accountable
‘Use friends as a ‘commitment device’ for building new and healthier financial behaviours.
‘Share your financial goals, hear what others are struggling with and find solutions for each other with fresh eyes. We never know if others have the same problems as us if we don’t talk about what we are going through.’
Step away from the mechanics of finance
‘The way we approach money is programmed by our parents and caregivers when we are young, before the age of seven.
‘When we realise that the beliefs we hold around money and the emotions attached to it aren’t actually our own – we were conditioned with them by others – we can initiate some interesting and non-confrontational conversations with our partners and friends.’
There’s no one-size-fits-all solution
‘Personal finance is by nature, personal, so there’s no “right” way to achieve better financial wellbeing, especially as our emotional relationship with money is very unique and defined by individual experiences.
‘Think of financial wellbeing as an ongoing journey, rather than the destination, but ensure you take consistent steps in the direction you want to travel.’
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