How your financial wellbeing is connected with your emotional wellbeing
As Coronavirus continues with many European countries enforcing stricter lockdown restrictions as we head into winter, we think it is an important time to talk about emotional wellbeing.
2020 has already been a year that has been defined by uncertainty and volatility across many aspects of our lives. In our recent economic update we re-stated our position that we expect global financial markets to continue to be more volatile than normal in the next 3 to 6 months. This financial uncertainty can impact our lives directly, increase stress and impact our emotional wellbeing.
We have written before about the links between mental health, physical health and financial wellbeing here and there is growing evidence of these links.
A new report out of the UK by insurer Royal London[1] shows the positive impact on your emotional wellbeing from financial wellbeing and from obtaining financial advice.
There is a negative spiral effect from poor financial health, leading to poorer mental health, which can impact earning potential and lead to further financial difficulties. However, there are direct links between not just being in control of your finances but feeling in control of your finances and your mental health or emotional wellbeing. Feeling in control of your finances can make you feel better about yourself.
This research in the UK showed that people obtaining financial advice described feeling better about their financial situation in three main contexts:
They felt more confident in their financial plans for the future;
They felt more in control of their finances
Having ongoing support and regular contact with their financial adviser gave them peace of mind.
If that isn’t enough, the report by the International Longevity Centre in the UK showed that financial advice can lead to an average of an additional £47,000 wealth for the client over a decade!
Getting financial advice can help you both emotionally and financially. Obtaining financial advice can help you to manage your situation, plan for the future, and improve your emotional wellbeing.
The first step to taking better control of your finances, no matter your current position is to get financial advice. When you do this, make sure you get Independent Advice. You should seek out the advice of an appropriately regulated, qualified, experienced and independent professional.
Then you can look at some key areas of your life:
1. Your goals. This includes the short, medium and long-term goals. Assess your goals and the plans you have in place in the context of where and how you are living now. What other aspects could influence those goals? Challenge yourself to capture what really is most important for you, both now and in the future.
2. Contingency Management. In over 20 years of giving independent advice to international professionals one thing that is consistent is that things change, and often unexpectedly. Take time to think about what comes next and how that fits into your plans for the future. Make sure you have or can establish a cash buffer and emergency fund.
3. Review your investments. When you are clear on your objectives it allows you to more clearly review your current investments and assess if you are on track to achieve your objectives. This clarity can help to block out the noise of short-term market movements and reactionary distractions. This is something we do continually with all our clients.
4. Start Today. Take that first step. Speak with us at Black Swan Capital about how we can help you to get your financial life into order, plan towards achieving your goals and in the process support your financial wellbeing.
