“Money is stress.”A pearl of wisdom attributed to no one in particular, but absolutely one that everyone can relate to. For many of us money causes us stress in any number of brilliant and unwelcomely unexpected ways. From work to relationships, there is no part of our life that is free from its influence. Whether you have too much or not enough, everyone will have suffered anxiety due to their financial situation at some point in their life.
However, facing those fears will stop you freaking out far more effectively than just burrowing your head in the sand. If any of these apply to you, then take a look at these innovative ways to solve your biggest problems.
1. What to do if you’re freaking out about an unexpected financial event
In a 2018 survey carried out by Salary Finance two thirds of those polled said they were worried about how they will cope if they lose their job or receive an unexpected bill. Living without a safety net can have numerous undesirable consequences, with damage to your mental health through stress being just one thing on a long list.
Start building a safety net.
Most experts advise an amount of at least £5k, but it can be as little a £3k. What is important is that you have enough put aside to cover you if you lose your job or get hit with an unexpected expense.
Start small, by saving a small amount each week that you can add to over time. By building your safety net piece by piece you minimise unnecessary financial pressure.
2. What to do if you’re freaking out about debt
Whether it’s your student loan, a bank loan, or mounds of credit card debt, each form of debt has its own difficulties that need to be faced and overcome. Whilst credit cards tend to have some of the highest repayment rates in the industry, and bank loans actually penalise you for paying back your loan ahead of time, it’s worth your while trying to minimise the stress this causes you.
Make a repayment plan
Look at your budget and see what you can afford to cut back on. Once you’ve freed up some extra cash look into the best way to repay your debts. Call your debt provider and discuss a detailed repayment plan with them that you both agree on.
Consolidate your loans
There are many ways you can do this. You can look into applying for a debt consolidation loan, which consolidates all your multiple loan repayments into one, easy monthly payment. This usually lowers your monthly payment, as you are only paying one interest rate.
Alternatively, especially with credit card debt, you can look into transferring your different balances onto a new card with 0% interest for a fixed time.
3. What to do if you’re freaking out about making ends meet each month
You wouldn’t be the first person to be caught in the paycheque-to-paycheque cycle. A new report has found that ‘economic instability is the new normal’, with 7 out of 10 adults in the UK ‘chronically broke’.
Break the paycheque-to-paycheque cycle
This article outlines the ways in which you can break this cycle and make positive financial changes.
4. What to do if you’re freaking out about your investments (or lack of!)
Get investment savvy
If you’re concerned that you aren’t investing but you want to, then make sure you are getting educated. Read at least one financial information piece a day, and read up on what investment options could be right for you. If you want to start small and work your way up to a bigger investment commitment, then you can open an investment position with Oval for £50. We’ve created several bespoke investment products that you can choose from.
Speak to an expert
If you’re worrying that you’ve made bad investments then you need to do some research. It’s always recommended to speak to a trained financial advisor if you have concerns about a bad investment.
5. What to do if you’re freaking out about saving for the future
One of the fundamental reasons people save is to fortify themselves against an uncertain future. Unfortunately, 53% of British 22-29 year olds have no savings whatsoever. This is due to a myriad of reasons, from debt, to education costs, to depressed wages, and inflated housing costs.
Start building your pension
If you are employed (PAYE) you will certainly have been auto enrolled in your employers pension scheme. Make sure you understand what your contributions are, and those of your employer. If you are self employed then look into opening a private pension plan that you can begin paying into each month.
Even starting with small contributions of 1% or 2% of your salary and then building up slowly is better than nothing. To really capitalise on the beauties of compound interest it is always better to start saving earlier rather than later.