How advice can boost your financial wellbeing
Financial planning Views & insightsGetting your finances in shape could be an important stepping-stone to better wellbeing. Here’s how a financial adviser can help
6 October 2023 | 4 minute read
If you’re feeling anxious about your finances, you’re not alone. Research shows that money worries are common and can affect people from all walks of life.
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Tackling your financial concerns could be an important steppingstone to better wellbeing. Read on to find out about the link between money and wellbeing, and some of the ways financial advice can help.
Money and wellbeing are intertwined
It might seem odd to reach out to a financial adviser when you’re feeling low, but if your worries relate to your finances then speaking to an adviser could be time well spent. According to the Money and Mental Health Policy Institute, there is a close link between money and mental health problems1. Its survey found more than eight in ten (86%) respondents with mental health problems said their financial situation had made their mental health problems worse, while nearly three quarters (72%) said their mental health problems had made their financial situation worse.
It isn’t just those with a lack of money who are vulnerable to finance-related stress. Our own study of people working in the legal profession found 94% of respondents said their finances caused them some degree of stress2.
With the link between money and wellbeing well-established, it may be the case that improving your financial wellbeing not only boosts your finances, but also increases your happiness and overall satisfaction with life.
Four ways financial advice can help
A financial adviser can help with nearly every aspect of your finances, but there are four elements in particular that are thought to define personal financial wellbeing3:
1. Feeling in control
The first element of financial wellbeing is about feeling in control of your finances. This means having a firm grasp of your incomings and outgoings, and a solid budgeting and savings plan. A financial adviser can help you comb through your bank statements so that you are more aware of your monthly spending and are able to find ways to spend less and save more. They’ll also look at whether you have any debts and how best to tackle these. Taking control of your day-to-day finances can help you feel more secure about your overall financial situation.
2. Capacity to absorb a financial shock
The second element relates to feeling more secure about your future finances. You might be saving regularly, but would your finances hold up in an emergency? If you haven’t built up a ‘rainy day’ fund, now is the time to do so. Having around six months’ worth of essential expenditure in an easy-access savings account could help you pay for unexpected repairs to your home or cover you during a period of unemployment.
There are other financial shocks which savings alone may not cover. Serious illness or death could cause a major hit to your household finances and jeopardise your family’s plans for the future. Taking out protection products such as life insurance, critical illness and income protection could provide vital financial support for your loved ones should the worst happen to you. Protection products vary enormously, so it’s crucial to seek financial advice on the right solutions for your individual needs.
3. On track to meet goals
You’re more likely to have a high sense of financial wellbeing if you feel like you’re on track to meet your objectives. Whether your goals include paying for your children’s education, saving up for a comfortable retirement or passing on a legacy to future generations, a financial adviser can help you determine whether you are on track and, if not, what could do to try to make up the shortfall. An adviser can also help you save and invest tax efficiently, for example through ISAs and pensions, so that more of your money goes towards your future.
4. Flexibility to make choices
The final element of financial wellbeing is having the freedom to make choices to enjoy life to the full. A financial adviser can build a picture of your life and give a projection of how long your money could last. They can help you ‘rehearse your future’ by exploring and stress testing the impact of the choices you make today. Whether it’s working less to spend more time with family, retiring early or selling a business, understanding the impact of your decisions helps to provide clarity and confidence about your finances, both today and well into the future.
Next steps
Money worries aren’t easy to tackle on your own. At RBC Brewin Dolphin, we can develop a financial roadmap that sets out where you are now, where you want to be, and how to get there. You can focus on enjoying life today, safe in the knowledge you’re doing the right thing with your money.
1 http://www.moneyandmentalhealth.org/wp-content/uploads/2019/03/debt-mental-health-facts-2019.pdf
2 ‘Financial wellbeing for legal professionals‘ – survey of 478 employees in the legal sector, February 2020
3 http://www.consumerfinance.gov/about-us/blog/4-elements-define-personal-financial-well-being/
The value of investments, and any income from them, can fall and you may get back less than you invested. This does not constitute tax or legal advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Information is provided only as an example and is not a recommendation to pursue a particular strategy. Information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.
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