Money

Five tips to stop stressing about money

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Anxiety over money is so common in the U.K. that a quarter (23%) of adults say they suffer from mental health issues as a result of worrying about their finances, according to one poll published on World Mental Health day on Thursday.

Four out of five (79%) U.K. adults say they are worried about money, with a third (35%) complaining that financial anxiety weighed on their minds on a daily basis. In fact, 32% said it kept them up at night, according to the poll of 2,000 U.K. adults by mobile bank N26.

However, there are small steps that can be taken to improve financial wellbeing.

From paying off debt to saving for a house, wedding or even a holiday, keeping on top of finances can seem like an overwhelming task. CNBC spoke to the experts for tips on easing the day-to-day stress of managing money.

Start saving

It may seem obvious but starting to save even a small amount of money can create a cushion when those inevitable unexpected costs come along, says Vishal Jain, CEO of financial wellbeing platform FairQuid.

"If you need savings to be something that will happen in the perfect world, when there are no expenses or demands on your income, then that never tends to happen," he told CNBC. "Life keeps throwing you curveballs."

He argues that prioritizing putting some money aside for a rainy day can also prevent falling back into a debt longer-term, even if it means it takes a couple more months to pay it off.

To get started, Jain advises setting up a standing order to a separate account on payday before it starts fighting with other demands on your money. To avoid the temptation of dipping into savings, he suggests making it more difficult to access the funds, unless in an emergency, by cutting up the account's debit card, for example.

Checking if employers offer savings clubs or payroll savings programs as part of their benefits, is another option.

Setting clear objectives, as well as tracking income and expenses, can help with this process, Jane Goodland, corporate affairs director at financial services firm Quilter.

"A driver of anxiety is this sense of a lack of control and a lack of control is driven by a lack of understanding," she says.

Ask the stupid questions

Similarly, building up knowledge of financial products you currently use, or will use in the future, is another way to regain a sense of control, says Martha Lawton, creator and host of money podcast Squanderlust.

"Don't be afraid to ask the dumb questions when it comes to money," she says.

It is the responsibility of companies selling financial products to explain technical terms clearly, Lawton points out.

"If you are speaking to a financial advisor or someone in a bank or another financial provider and they do start to patronize you, or condescend, or can't explain without using jargon, then that's a bad sign and you should question if you want to be involved with that business," she tells Make It.

Talk to someone

Paying off sometimes large debts can seem daunting and was the main concern for a fifth (19%) of 2,000 U.K. adults surveyed on the impact of money on their mental health by bank TSB last week.

Talking to family, friends, or an employer can alleviate this anxiety, says Anthony Morrow, CEO of online financial advice service OpenMoney.

Speaking to an employer is really important, he says, particularly if money worries are affecting your ability to do a job effectively. Even approaching the company you owe money to can help, he says.

"Anyone who owes money to a regulated entity, which most lenders are now, [these companies] have an obligation to look at these things a lot more sympathetically than they have done in recent years," he points out.

But the trick is to have this conversation early, Morrow adds.

Dealing with debt head-on and being honest about your situation is a must, says Goodland.

"Don't ignore it or put your head in the sand," she says. "That debt is not going to go away on its own, it needs to be actively managed."

Reassess unhealthy relationships

Two-fifths (41%) of those questioned by TSB said not being able to afford the lifestyle they want was their top money worry.

Lawton cautions against caving into pressure created by certain work or social groups, and reassessing relationships that could be detrimental to your money and wellbeing.

"I've seen people get into a lot of trouble actually trying to keep up a lifestyle their work is promoting, with work socializing and that can be really destructive because it feels like your career is tied into an unhealthy spending pattern," she says.

Research by jobs website Totaljobs discovered that the average worker in the U.K. forks out £500 of their own money a year on work-related drinking, adding up to more than £25,000 over the course of their career.

Being selective with work socials can curb costs, she says and if this is not possible, then it might be time to consider if your workplace is really a healthy environment.

The same mantra should be applied to your social circle and friends – and if they are in the same boat they might actually be happy for you to suggest doing more reasonably priced activities, says Lawton.

"The people who care about you will not want you to damage your finances for the sake of hanging out with them," she comments.

Be realistic about your financial goals

Lawton says thinking of money in absolute terms can be restrictive and ultimately demotivating, so it's important to accept there is no "silver bullet" to all your financial worries and be realistic about with your goals.

"Tempering your ups so you don't fall as far with the downs is a really good idea," she says, while overly strict budgets are unsustainable long-term and leave "no money for any kind of fun."

Morrow agrees setting an unachievable budget can have a "compounding effect on stress." Quilter's Goodland suggests building in rewards to incentivize reaching financial goals.

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