5 practical ways to be happier about your finances

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This year’s UN International Day of Happiness is on 20 March – a day when people around the world will be focusing on the things that make them feel joyful.

As the old saying goes, money can’t buy you happiness. Nevertheless, financial stress can be detrimental to your wellbeing. Having enough money to retire comfortably, buy the home you want or provide for your family, could lead to a happier life.

Yet according to a study by Perkbox, money is the biggest cause of stress in the UK, with one quarter of employed Brits claiming they worry about money every single day.

If you have found that money is a subject you’d rather avoid, you could take inspiration from the International Day of Happiness to start focusing on your financial goals.

Read on to find out five tips for becoming happier about your finances.

1. Keep your emergency fund topped up

Often, financial stress comes from asking yourself “what if?” questions.

“What if my car doesn’t pass its MOT? Can I afford hundreds, or even thousands of pounds in repairs?”, or “What if my home is hit by bad weather, causing expensive damage?” are common questions that could keep you up at night.

Indeed, when you save money each month, you might transfer your funds directly into an investment account, or into your pension. While these are both highly important methods of saving, having an emergency fund – usually, an immediately-accessible cash savings account – can provide short-term relief when you encounter bumps in the road.

If an unexpected situation comes your way, you may be able to tackle it more easily, as your emergency fund could cover the costs, and potentially reduce your stress overall.

2. Initiate regular financial conversations with your significant other

According to a Royal London study published in February 2022, money is the most common cause of arguments between couples, with 62% of couples reporting that they have fought over money during their relationship.

Indeed, it can be tempting to leave money out of your conversations with your significant other – after all, money isn’t always the most romantic topic. However, by initiating regular financial conversations in your relationship, you can establish honest communication, and better combine your financial goals.

Having these conversations might not always be easy, but knowing you are on the same page about your finances can help relieve tension and make you happier. If you are planning to move home in the near future, for example, discussing your priorities can help you feel more confident as you take this next step.

3. Improve your general mental health

The Covid-19 pandemic proved difficult for many people and, if you felt your mental health suffer as a result, you’re not alone.

A study published by the Chartered Institute of Personnel and Development (CIPD) revealed that 36% of people felt that their mental health became poorer during the pandemic, and 32% said their financial security worsened too.

By taking steps to improve your overall mental health, you could find that you are in a better place to make informed and rational financial decisions. For example, feeling anxious could lead you to make rushed choices, such as buying a more expensive product because you haven’t taken the time to shop around.

If you feel your mental health is suffering, it might be constructive to speak with a healthcare professional, so, among other things, you can have a stabler, more measured approach to your finances.

4. Use your life goals as financial motivation

Whether it’s buying your dream home, having a family, starting your own business, or simply saving enough for a comfortable retirement, we all have dreams or goals in life.

When it comes to turning those dreams into reality, having a financial strategy laid out can be life-changing. By making practical steps towards achieving those all-important milestones, you could feel motivated to be more financially disciplined.

For example, with your life plan in mind, you could pay your future self on payday, rather than waiting until the end of the month to save money. In addition, you could invest in financial protection, so that an illness or injury is less likely to derail your plans in the future.

5. Develop a long-term relationship with a financial planner

Your financial planner is there to provide expert guidance, financial knowledge, and strategic thinking. Most importantly, in some cases, your financial planner can also act as a confidant.

A financial planner is here to help you to achieve your life goals, applying their expertise to your unique circumstances, and ultimately helping you to get the things you want out of life.

In fact, a Royal London study revealed that, of the participants who already worked with a financial planner, 90% of those who received regular holistic advice had higher levels of satisfaction than those who took purely transactional advice.

Forging a holistic, long-term relationship with your planner, by checking in for regular reviews and working with them as you go through the ups and downs of life, can provide immense value not just to your money, but to your overall happiness.

Get in touch

Improving your financial position can help you to improve your mental wellbeing. To find out how we can help you, please get in touch. Email info@blueskyifas.co.uk or call us on 01189 876655.