October is Mental Health Awareness Month, and while there are many factors that have an impact on one’s health, one factor that may be less well known is financial stress.
Carla Oberholzer, DebtSafe’s spokesperson and a debt advisor, said that stress related to finances or debt had an impact on the health of South African consumers.
“To continuously worry about money is not healthy and is commonly associated with physical symptoms that impact your general health – for example, your mental and emotional health and well-being,” Oberholzer said.
Charnel Collins, CEO of National Debt Advisors, said: “There are many ways financial struggles can affect your mental health.
“Being unable to support your family, honour your payment commitments, or make ends meet will cause feelings of anxiety and panic. Financial stress can also affect one's social life, leading one to withdraw from social engagements.
Here are four ways you can manage your money to stop financial stress:
1. Budget
When drawing up your budget, list your expenditures, monthly deductions, and income. If your total expenses are more than what you earn, you need to look for ways to reduce your spending.
“Writing down your income and your expenses helps account for where you spend your money,” Collins said.
2. Emergency savings
Kathryn Mains, founder of Money Savvy Humans, stresses the importance of having an emergency savings account.
“My suggestion would be that you have 12 months’ worth of living expenses saved up. It’s impossible to know what curve-balls life will throw at you, but you can plan for the worst and hope for the best,” Mains said.
Collins said: “Not having savings in place could result in your having to take out a loan when there is an urgent need for money, which often leads to stress.”
Remember that you can start small and slowly increase your contributions to your savings account.
3. Seek financial advice
Paula Walker, a director and advisory partner at the Consolidated Wealth Group said: “A financial adviser will help you focus on the big picture and will build a portfolio to match your goals.”
"People should think of a financial advisor as their own personal trainer, someone who will guide them and keep them motivated about financial planning.“
4. Manage your debt
Start paying off the debts that have the highest interest rates first. Consumers can speak to a qualified debt counsellor who can help them set up a manageable debt repayment plan.
“Paying off your debts in manageable monthly instalments and using any extra cash towards settling your debts will help ease financial stress,” Collins said.
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