Cost of living crisis: how to get ‘financially naked’ in three simple steps

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As the cost of living crisis bites, the chartered financial planner Emma Fielding Shares simple ways to take back control of your finances that’ll make you feel more empowered: from learning your ‘money mindset’ to easy ways to budget

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Elf Care Sunday – A day that’s all about you. Typically, this can be to take some ‘me’ time to enjoy a relaxing bath, to take a yoga class or run, or to have a ‘money date’ with yourself to review your budget. Yes true.

It may not sound like much fun as a place of pampering, but financial self-care is just as important as emotional and physical self-care, so why not make it a priority and talked about more. ?

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When we think of money, we immediately think of spreadsheets and numbers, and many of us zone out or bury our heads in the sand. Let’s be honest, how many times have you avoided checking your bank balance for fear of what is (or isn’t) there?

What isn’t often talked about is that money is emotional, apart from numbers. It makes us feel things – happy, anxious, secure, worried – and it has a huge impact on our mental health – either positive or negative.

According to a survey by Investopedia, 74 percent of millennials say they are “at least somewhat stressed” about managing their finances. With the cost of life crisis in full swing, it is more important than ever that we dig deeper to understand our thoughts and feelings about money and take back control.

Financial wellbeing is all about confidence and control of your finances, which in turn leaves you feeling less stressed, allowing you to live your life with a sense of security and independence.

Given the current climate, now is especially a good time to be ‘financially naked’. Start with these three simple steps to get you on your way to improving your financial well-being.

Understand your ‘money mindset’

Take it back and take an honest look at yourself and your finances. The first step to improving financial health is to understand your ‘money mindset’ – your unique perspective and beliefs about money. What are your past experiences with money that may affect the way you manage money today? Were you taught to save for something you really wanted or did you get a credit card at the first opportunity and max it out?

Understanding your money mindset is important because it drives the decisions you make each day that affect your overall financial situation. It also allows you to understand why you might be doing what you do with your money and challenge this approach to create better habits to move forward.

For example, the excitement and instant gratification you get from buying something expensive that you want on credit, gradually begins to dwindle as you pay off the debt over the next three years – credit is not a bad thing if managed correctly. , but it is management that is right that is the key.

make a budget

Well, you’ve certainly heard it before, but over the next month, you have the challenge of recording the amount of money coming in and giving a thorough description of everything you spend money on.

This is an important exercise in financial wellbeing, as it will give you clarity and help you make more informed financial decisions.

You may be surprised at how much you spend on eating/buying coffee and this may influence your decision to make some changes in life. Apps like Emma and Plum can help you track your spending. App banks like Monzo and Starling are also great because they are really easy to do daily checks on your phone and you can deposit money in different pots for different things, for example bills, an upcoming holiday and Christmas.

Once you have an idea of ​​how you’re currently spending your money, decide whether you need to rein in things. Make a plan by making a budget. I cannot stress enough how empowering it is to be in control of your finances.

Set a ‘Money Date’

Checking in regularly with your finances is the key to staying in line with your budget and financial health – so I recommend engaging in a regular ‘money date’ with yourself or your partner to check that you’re doing the right thing. are on the way and assess what changes you can make going forward.

Every Sunday, mid-morning I would make a coffee, sit down, and do that for about 30 minutes. I see what I have spent in the last 7 days and then plan for the next 7 days. Monitoring weekly rather than monthly works best for me because I’ve found that checking my money more often makes it easier to keep track of and remember exactly what I’ve spent my money on. It’s also fast, and it allows me to correct course before the end of the month, and paydays if necessary. And once my money date is over, I make brunch and then head off for a leisurely stroll around the park. Well, it’s self-care Sunday, after all.

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