According to the annual Financial Stability Tracker report from Creditspring, a quarter of people said their mental health is the worst they’ve ever experienced due to money worries. The research showed that three in ten people said they could not get the help they needed from the Government. And just under half of 25 to 34-year-olds say their mental health cannot improve while they are in debt.
It’s easy for fears about cash to set off a spiral of depression and anxiety that can feel overwhelming. Knowing how to face down your financial fears can go a long way towards helping you fight back – so here’s my guide on how to get started.
Facing your fears
You’ll need to work out a basic budget covering your incomings and outgoings in order to get help from a business or the fantastic debt charity StepChange.
Psychologically, for many people even thinking about doing this can spark an anxiety attack, so keep things short and have some distractions. Sitting in silence while you look at your bank account is depressing. So, my two top tips are:
1. Make sure that you have some music, the radio, or the TV on in the background.
2. Set a timer for no longer than 30 minutes. This will help you focus – and more importantly, you’ll know it’ll be over soon.
Once you’re ready to get started, remember, keep it basic. You can get a list of direct debits and standing orders easily with online banking. Write down the main regular payments you make, like; energy, broadband, water, council tax and rent/mortgage. In a separate column, note down your other main expenses (estimate them if need be), like the food shop, travel, insurance and entertainment. Now write down the total amount of money you have coming in.
You’ll be amazed how quick this is to do – and what’s left is the amount of money you have left over each month in rather stark terms. Don’t panic.
What to do if you’re overstretched financially
You may find that you have less money coming in than you have going out. Or there’s not enough left over to cover an emergency. This means you need practical, realistic help now.
If you only need a short breather to get back on top of your cash, speak to your bank to see if they can give you a temporary overdraft for a month. If you don’t meet their criteria for credit, explain your current situation. Your bank has an obligation to try to help not make the situation worse. They aren’t going to write everything off, but they can give you a break on charges and interest until you’re back on top of things.
If you need longer-term help, you meet the definition of financial difficulties. That’s where the free debt charity StepChange can step in. They have helped millions of people tackle financial problems that seemed impossible to escape from. StepChange will ask you for that budget information you’ve already prepared and will set up a tailored plan, working out what you can afford to pay each month. They then contact all your creditors on your behalf. Don’t ever go to a business that charges for this or for things like IVAs or bankruptcy – StepChange (www.stepchange.org) is totally free.
Most of all, remember you’re not alone – and there is help out there.
Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist.