How to manage financial stress

Household finances are being stretched like never before, as we are in the middle of a cost of living crisis, but what many people underestimate is the impact this financial stress can have on your health.

Feeling stressed, low, anxious or depressed is a normal and understandable response when you are going through financial hardship. Money and mental health are very strongly connected.

Here are some practical things you can do to look after your health and your finances during this difficult time.

Looking after your health

The NHS.UK website has a number of tips to help you cope with money worries, particularly if you’ve lost your job, been made redundant or you’re struggling with debt.

Stay active

Keep seeing friends, and if you have more time because you’re not at work, try and do some form of exercise. More physical activity can improve your mood, especially if you’re feeling low.

Get debt advice

If you’re going into debt as a result of losing your job, there are a range of free sources of impartial advice and support on how to deal with your debts.

It’s important that you try to speak to somebody about this. By talking to somebody, you may find it easier to face your problems head on. 

Money Helper offers some simple steps to help with your debts. 

Do not give up on your daily routine

Try to keep getting up at a normal time in the morning and stick to your usual routine. 

It can be easy to fall into a spiral of low mood and to avoid doing the things that bring you pleasure, like exercise and speaking to friends.  

Try to focus on what you need to achieve by setting yourself small, realistic goals each day.

Managing your finances and reducing stress

Finding ways to make your money go further can be very important during such a difficult time. A great way to do this is to create a budget.

We have a free budget planner tool to put you in control of your spending. You keep track of your pay, benefits and your regular outgoings in one place. You can save your budget plan and return to it at any time.  

• Download

Once you’ve compared the money coming in to what you want to spend, there are several ways that you can put together a budget. 

One of the most simple and effective is an ‘envelope’ budget. This simply means separating your money out into pots, or envelopes, for spending on different things. 

For example, you can create a pot each for household bills, food shopping and rent or mortgage payments.  

Coping with job loss and redundancy

Being made redundant can be one of the most upsetting and stressful experiences a person can face.

While redundancy can be an incredibly daunting experience, it’s important to remember that your employer has to follow certain rules in order to ensure that the redundancy process is fair.

For you to be made redundant your job has to cease to exist completely; your employer is not allowed to take on someone else to directly replace you.

If you are made redundant your employer should explain to you why and how you were selected. If you believe you were discriminated against, you have the right to pursue your claim to an employment tribunal.

If losing your job has caused your health or wellbeing to deteriorate, there are a number of places you can go to seek support:

•  Samaritans is an organisation that offers free and confidential support for those experiencing feelings of distress and despair via a free 24-hour helpline. Contact Samaritans on 116 123.  

• Anxiety UK is a charity providing support to those diagnosed with an anxiety condition. Call 0344 477 5774 - lines are open Monday to Friday, 9.30am to 5.30pm.

• The National Careers Service offers free advice and support for those who have lost their jobs. You can speak to an NCS advisor by calling 0800 100 900 or by taking part in a webchat. The service offers help to those living in England only.

Check your bills

It’s always a good idea to check your regular household bills.

Checking your regular bills could be more important than ever right now. With more and more people working from home, bills for energy, water and mobile data may well be going up.

So, now would be a good time to see whether these are services areas where you can save money by switching.

Help with your debts

If you’re facing debts as a result of your changed circumstances, there are a number of places you can turn for help.

Independent advice and support are available from the following debt charities:

• Citizens Advice can provide free help in person or by phone

• StepChange Debt Charity can provide advice or a free debt management plan (DMP)

• National Debtline can offer free advice by phone and help you set up a free DMP

• PayPlan is an independent provider of free DMPs

• Shelter is a housing charity that can provide advice by phone, online or in person

• Christians Against Poverty can visit you at home to give advice and help you budget

Getting advice on your debts can be a great first step to helping you deal with your situation. 

These organisations’ experts can help you prioritise your debts and set a realistic budget based on your finances.

In many cases they can also help you plan how to pay off your debts and communicate with your creditors on your behalf.