January can be a tough month financially, from gaps between paychecks to the aftermath of festive spending – in fact, 47% of Brits admitted they are heading into 2024 feeling worried about money.
Following a new nationwide survey revealing that nearly a third of UK adults are avoiding checking their bank account due to their financial situation, credit management company Lowell is encouraging Brits to face their finances head-on and set themselves up for positive habits in the new year.
How do Brits feel when talking about money?
Talking about money can bring up varying emotions. With there still being a stigma around discussing finance, 17% of people surveyed said that they felt uncomfortable talking about money, with a quarter of Brits (25%) sharing that talking about money makes them feel anxious, stressed, or ashamed.
However, when overcoming the stigma, talking about money can help people take control of their situation, with 1 in 5 (20%) feeling empowered or in control when talking about their financial situation. Interestingly, men (31%) are more likely to feel comfortable talking about their financial situation than women (19%) overall.
As 22% of Brits said that they avoided seeking financial advice from a professional, beginning the conversation with yourself can be a great launch point for getting to grips with your finances. With this in mind, financial experts at Lowell have shared insights into five conversation topics people should be having with themselves in the new year.
1. What are my long-term financial goals?
Rather than starting with number crunching, the first point of action should be to determine your long-term financial goals. This might be clearing your debt or saving for your retirement. Having something to focus on will make it easier to save each month, as you know what you’re working towards.
2. What is stopping me from achieving my long-term financial goals?
When determining your financial goals, it’s important to predict any potential hurdles to achieving them. This could be everything from outlying debt to concerns about your money that are affecting your mental health. From there, you can identify ways to overcome these barriers.
3. How can I set up a budget that works for me?
Once you know where you stand and what you hope to accomplish, pick a budgeting system that works for you. For example, for a more flexible strategy, use the 50/30/20 system, which splits your after-tax income across three major categories: 50% goes to necessities, 30% to wants, and 20% to savings and debt repayment.
4. How can I further educate myself on financial wellness?
As 1 in 5 (20%) do not feel confident in their knowledge of financial products, services, and terms, education is a key part of financial health. From Reddit threads to financial blogs, there are several free online resources for financial education. Make sure to also read up on key financial calendar dates, from energy cap rises to tax deadlines.
5. Am I prioritising my spending?
Start by allocating enough money for fixed expenses to ensure you have food, a roof over your head, utilities paid, and transport covered. If you have any debts, make sure you are selecting priority debts to pay off, such as council tax and rent.
Commenting on the tips, John Pears, UK CEO of Lowell UK, said, “As we move into the new year, taking control of your finances can help set us up for good habits for the rest of the year. Not only can this have a positive impact on our financial health, but it can help us realise our goals in other ways, from mental well-being to social well-being.”
Although Blue Monday is pushed as the most challenging day of the year, mental health affects people across the nation year-round. With debt being a large trigger for many people’s mental well-being, having an open and honest conversation with yourself and, eventually, your wider support network can help alleviate negative feelings around finances.”
“We’d like to remind anyone feeling financial pressure to reach out for support, and a list of organisations that can help can be seen here.”
You can find further information on the data and advice on how to get your finances in order for 2024 here.