Tuesday, 10 August 2010

Time for a financial health check?

What does being healthy mean to you?
A daily grind at the gym? An organic diet based on superfoods? 
Remembering to take multivitamins and meditate?

What about your financial health?

Money may be boring but it’s a fact that your psychological wellbeing is closely linked to your financial security. People who are in debt are more likely to suffer from anxiety and depression. Around 3.8 million people in the UK say money worries have kept them off work. When our finances are in good shape, we feel in control of our lives.

Give your finances a quick health-check by answering the following questions:

  1. Do you have enough savings to cover at least 3 month’s expenses?
  2. Do you pay off your credit card bill in full every month?
  3. Have you got a pension?
  4. Do you avoid shopping when you’re stressed, miserable or just plain bored?
  5. Do you find it easy to talk about (or ask for) money?
  6. Do you know how much you spent last month and what on?
  7. Do you have a good understanding of the money world?

How did you do?
Seven Yes’s and you’re doing brilliantly.
Less than seven isn’t so good and suggests you might not be in the full bloom of financial health. But you can do somehting about it.

Here are a four steps to take now to bring your finances back to fitness:

  • Save automatically. Sweep an amount every month straight into a savings account. You won’t miss what you didn’t have and you’ll have a back-up fund in case of emergencies. OK, interest rates aren’t great at the moment but simply labelling a pot of money ‘savings’ will make it psychologically harder for you to squander it. If your mortgage goes down or you get a pay rise, divert the amount and carry on as if you hadn’t had it.
  • Sort out you pension now. It is estimated that 70% of working women in the UK won’t have enough to live on when they retire. If your employer runs a pension scheme, opt into it. Every day you’re not in it you’re turning down free money. If you’re not employed or your company doesn’t run a scheme, get independent advice on how you can start your own pension. It needn’t cost the earth but the earlier you start the bigger the payout.
  • Be aware. Face up to debts. Stop hiding statements and start scrutinising them. Know where your money goes. Track your spending for a month. Note down any emotional spending triggers, so you know the danger signs. We have free worksheets you can download from our website.
  • Wise up. Browse financial websites, peek at the financial pages of the newspaper or just ask someone to explain the basics to you. It’s not rocket science and there are some very accessible sites out there.We have tons of links and resouces to help you on our website.

 Add financial health to all the other health-giving activities that put a spring in your step and make you feel in tip-top shape. Then you can get on with enjoying life today knowing that tomorrow’s taken care of.

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