Many things can harm our mental health. It is more important than ever to look after your mental wellbeing following all the changes to the way we live, work and interact with our friends and family over the last year. But our financial wellbeing is something that may be overlooked when assessing what we need to gain control over.
With the start of the new fiscal year beginning next week, we wanted to take a look into what can be a contributor to feelings of depression and anxiety for many people. Debt is something that most people will experience in some way, but if you aren’t in complete control of your finances, it can put a strain on your mental health.
Stay in control of your finances. Sounds too easy, doesn’t it? But it’s true, keeping a tab on your outgoings, especially your spending, will remove any doubt and anxiety you feel between paychecks and in turn will allow you to keep a tab on your mental health.
Here are a few ways you can take control of your financial situation and support your financial wellbeing:
This is the best place to start if you are often faced with unwanted or worse still, unexpected payments leaving your accounts. If you are a business owner there’s a good chance you already utilise a cash flow, but this is just as useful for your personal accounts.
A cash flow is a statement that summarises the amount of cash entering and leaving an account. Vital for managing your cash position within a business, it is not to be overlooked when projecting your personal monthly incoming and outgoing cash payments.
Download our Cash Flow Template to start taking control of your accounts. It will give you a head start each month and if you owe any money for loans, credit cards etc. then you will be able to quickly and easily plan your payments according to what you can afford monthly, giving you an insight into how and when you can clear small debts.
HMRC can make reasonable adjustments according to an individual’s situation. Debt can affect your mental health and symptoms such as depression are considered a disability that can put you at a disadvantage when it comes to being able to manage your financial situation. Therefore, informing them of this sooner rather than later can make dealing with them a lot easier.
Letting them know you are unable to make a payment before it happens is also better done early on. Some arrangements can be made to avoid you getting into further debt and being issued fines and penalties.
If you’re facing any difficulty in making a tax payment HMRC have options to help you. Give them a call and ask about their affordable monthly payment options. They will then work with you to negotiate a time to pay based on your income and expenditure.
The time to pay arrangement will be based on your specific financial circumstances. HMRC will work out what you can afford to pay and then use that to work out how much time you need to pay.
You can use a time to pay arrangement to cover all outstanding amounts overdue including penalties and interest incurred. You can find out more on the Government website or by giving HMRC a call. If you want to speak to the Whyfield team about it, we would be more than happy to advise.
While entirely possible, there isn’t a complete solution to your debts that doesn’t involve paying them. That said, there are things you can do to lighten the load and take some of the pressure off. This is all about creating a better headspace for yourself regarding your money, so every little really does help.
Be careful not to just trade out one debt for another. Payday loans, for example, give you cash quickly. But whether you’re paying back over 6 or 12 months, the interest on top is never worth the amount you gained in the first place. You will have just paid off one debt to start again on another.
However, there are some quick-fire fixes you can look into that may chip off some of the interest and reduce some of your outgoings.
You may be owed a tax refund. If you are self-employed or even employed there are costs you may be able to claim as allowable expenses:
As a business owner, there may be grants and other support options that you are entitled to. The Self-Employment Income Support Scheme has supported many self-employed individuals during the coronavirus pandemic and has been extended to two more grants. The Fourth SEISS grant will be available to apply for in late April.
An easy fix to that ever-growing credit card balance is making a switch. Many providers offer 0% interest on balance transfers, often for 12 months or more. Shop around and halt the interest in its tracks while you start to pay off your balance.
You might not realise it, but you may be in the wrong band for Council Tax payments. Just a call to your local council will let you find out if you are paying the right amount and if you’re not you may be pleasantly surprised by the outcome.
Understanding your debt and how to start reducing it will give you a sense of control and hopefully relief. Taking away the pressure will allow the anxiety of seemingly endless debt to fade away as you take the steps to reduce it.
Don’t let your finances be a strain on your mental health. Find out how we can help by getting in touch with our team or by learning more about our services. We may be able to assist you as you tackle your debt and point you in the direction of the best support based on your situation.