How Mental Well-Being and Financial Stress are Connected

The link between mental and financial health is more intertwined than you may realise. According to a recent survey, the most significant cause of stress came down to finances (73%), followed by politics (59%), work (49%) and family (46%).

Furthermore, the aftermath of the pandemic has continued to impact mental well-being, resulting in people becoming more stressed about protecting and preserving their wealth than maintaining good health.

We all have goals—many are linked to our finances, from paying for higher education to retiring early, buying a new home, and more. Trying to make investment decisions while coping with financial stress, especially on your own, can be overwhelming and time-consuming.?

So, what is the cause of financial stress??

Financial stress is usually chronic and can cause severe health and well-being issues, from trouble sleeping to physical health problems. Chronic stress also impacts mental well-being; hence the connection between mental health and money is inevitable.

To start curbing your financial anxiety, you need to identify what’s causing your stress first; among many other reasons, some of the more recent causes for increasing financial stress come from the pandemic.

Numerous lockdowns, inevitable business disruptions and fear of the unknown have accumulated financial stress on individuals and families over the past few years. In addition, inflation, volatile markets, and rising energy, fuel, and commodities costs have significantly impacted spending behaviour and lifestyles.

What’s important to know here is that financial stress is inevitable when so many factors come into play. The best way to overcome it is by not keeping it to yourself and talking to a trusted family member, friend or qualified professional. While family members and friends can help air out some of your stresses, a professional can do both. They will not only be able to give you a different perspective and alleviate some of those stresses. Still, They could also help you look at the bigger picture and present facts and figures to help you make better financial choices whilst being protected from potential bumps in the future, i.e. changing regulations, taxes, inheritance planning etc.

?How can financial well-being be improved??

Poor financial well-being comes from not having a lack of control or confidence in your finances. The best (and only) way to improve this is to take action to regain a sense of control by speaking to an expert or educating yourself on managing personal finances.

It is recommended for HNW individuals and families to choose the adviser route. Complex financial affairs and managing large amounts of wealth come with risks that a qualified financial adviser better overlooks. Your adviser should ideally wear two hats – one of an adviser and one of a coach. By having an adviser that can embody these two critical roles, more often than not, most financial stress is alleviated.

On the other hand, if you choose to go the DIY route, having access to quality information and resources is key to making informed decisions. Although risky, it can be beneficial to people with smaller amounts of investments and capital.?

Now more than ever, it is essential to take advice when creating a long-term, sustainable trajectory for your wealth, which will vary significantly depending on your age or personal situation. For example, younger professionals have the flexibility to reduce their debt or outgoings in response to higher inflation. On the other hand, families would have to revisit their financial goals to ensure that their plans are still on track.?Seasoned investors may need to review their investments and planned retirement dates. In contrast, retirees might want to check their monthly income to ensure they have enough to sustain their lifestyle now in the future if high inflation continues.

?Is financial advice worth it??

Unfortunately, there is no straightforward answer to this question as it all boils down to your circumstances, knowledge, time and accessibility. Nevertheless, The value you derive from a financial adviser will largely depend on their expertise and the complexity of your financial affairs. This could include some or all of the following:?

·?????You have investable assets of over $500,000

·?????You are looking for private market opportunities

·?????You have inherited money

·?????You are planning to pass on a legacy to your family or loved ones

·?????You are planning to invest your savings

·?????You are looking for estate and secession planning

Suppose you see yourself needing an adviser; the sooner, the better. A recent report from the UK found that receiving professional advice boosted private wealth by ￡47,706 in 2016 from a sample of 162. Planning for the long term, 20 or even 30 years before retirement, could make an even more significant difference.?

Here an adviser can add value by helping you protect your assets through effective tax planning and diligent wealth structuring, whilst giving you the confidence to grow, invest and tailor your investments to match your goals. They can also help you make logical decisions and avoid costly mistakes during uncertain times.

Therefore, financial advice isn’t simply about numbers on a page. It can help you map out the future you want and significantly improve your overall economic and mental well-being.?

We are available to provide the guidance and financial planning you would expect from an adviser and coach. If you have any questions, feel free to contact us here.