It’s understandable that money worries can lead to stress and other mental health issues.  This could be because someone is short of money and is worried about how to make ends meet.  It could be because someone is just getting by and is worried about the future (especially post-Brexit) or it could even be because someone has to start handling more money than they’re used to and is worried about making mistakes.  Like most problems, ignoring money worries is only likely to make a situation worse instead of better.  Acknowledging the issue puts you in a position to do something about it.  The next step is to take action and here is a suggested plan to help you move forward.

Get everything together and organise it

You need to have a clear idea about where you are in the present before you can make effective decisions about what you are going to do in the future.  This means that you need to get all your financial paperwork together, ideally in one place (or two places if you need to keep both paper and digital records).  Once you have everything together, go through it, ditch (meaning shred and recycle) everything which is out of date, and organise everything else so that you wind up having a clear view of exactly where you stand financially right now.  This in itself could prove to be all that you need, if not, at least it will (hopefully) be therapeutic and help you decide on your next steps forward.

Work out how much money you need to live on

For the moment, ignore and debts and focus on the minimum required to keep you housed, clothed, fed and able to get where you need to be, for example, to work.  In this context, housing includes paying essential bills such as utilities (which these days arguably includes the internet).  You can make a case for including the TV licence, since it is very affordable and ending a TV licence can lead to some administrative hassle, even if you’re within your rights to do so.  You cannot, however, make a case for the like of subscription TV, unless you are locked into a contract, in which case you might want to think seriously about exiting the contract as soon as you can and certainly before renewing it for another lock-in period.

Commit to recording every purchase you make for a month and then analyse your spending

Your bank records will allow you to track your spending on core expenses such as utilities and they’ll also let you see how much you’ve spent, in total, whenever you used a payment card.  They won’t, however, track the details of each purchase.  Similarly, they will record cash withdrawals but not show you where you spent that cash.  You need receipts for that and if you don’t get a receipt, or forget to keep it, you need to make a note of the purchase some other way, for example, in a note-taking app.  Then you can see where your money is actually going and make informed decisions on what, if anything, you need to do about it.  For example, if you frequently find yourself making small “treat” purchases, because you’re stressed, then you can focus on avoiding these and putting the money you save to more constructive use.

Analyse your debts and deal with them

The reason for leaving this step until last is so that you can have a clear idea about how much disposable income you have to put towards your debts.  If the answer really is “none” then you may have to look at insolvency and if that is the case, then, hopefully, moving forward with you in control will help to alleviate your stress.  In many cases, however, just getting your financial chaos in order and taking control of the situation will put you in a much better place to tackle your debts and leave you feeling more confident about your financial situation and happier about life in general.

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