How are your finances looking right now? Some will be able to answer this without hesitation, others may shrug their shoulders, unsure. While a lot of us may dismiss the idea that money can buy happiness, a lack of money can certainly cause stress and even lack of sleep.
According to debt charity StepChange, over 70% of their clients report having low energy or insomnia while research from mobile bank N26 found 9.5 million UK adults have suffered from mental health issues due to financial anxiety.
Money worries can entangle themselves in all areas of our lives and as tempting as it may be to bury your head in the sand, this often only makes the problem worse.
Becoming more aware of your finances, understanding how your beliefs around money impact you and filling any gaps in knowledge can all help. This is, essentially, financial self-care. Here we’ll look into this idea in more detail and explore how financial coaching can give you the support you need.
Understanding your relationship with money
If you want to change your money habits, the first step is to understand why you feel the way you do about money. Many of our habits and beliefs live in our subconscious and are often picked up in childhood. The way your parents talked about money, for example, may have seeped into your subconscious, planting a belief that is now affecting how you view money.
Consider the following beliefs and ask yourself if any resonate:
- Money is the root of all evil.
- Wealthy people are unkind.
- Money is difficult to earn.
- I’m not good with money.
These are just a few examples of limiting beliefs - beliefs that hold us back. When we believe these statements, our brain seeks confirmation of this (this is called confirmation bias). When we see this confirmation, our belief gets cemented.
What could happen if we changed these beliefs to something more positive? If we were to believe, for example, ‘Money comes to me easily and offers me freedom’, how would this affect us? Our confirmation bias would then look for confirmation of this and, the theory is, our subconscious would direct us to take action that would make this belief true.
Of course, it’s important for us to highlight here that the economy is a complicated thing, and we’re certainly not all on a level playing field. Changing your beliefs about money will not magically change your situation. Instead, we recommend you view it as one tool in a larger toolbox you can access for support.
Finding the gaps in your knowledge
Taxes, pensions, investments… How many of us were taught about these things in schools? Many of us weren’t, so it’s not surprising that we feel unconfident around money. Some also have negative connotations with numbers and maths, finding anything money-related just as repellant.
Taking a look at your knowledge about money and picking out any gaps is a crucial step. Once you’ve identified what it is you don’t know, you can look to educate yourself. It may not sound like the most fun way to spend your time, but understanding how to manage your money practically can go a long way in changing your relationships with money.
With practical knowledge under your belt and a positive mindset, change can happen. When it comes to educating yourself, we would recommend going to experts and learning from official sources. The Money Saving Expert website, for example, is a trusted and well-respected resource to get started with.
How financial coaching can help
For some people, talking about money can feel shameful or even taboo. Talking to friends or family about money worries can also be tricky as their relationship with you may cloud their opinions. This is why, for many, talking to someone objective in a confidential setting, such as a coach, is an ideal option.
The aim of a financial coach is to help you better understand your relationship with money, make any changes to this relationship and support you in developing greater control over your finances.
A financial coach is not the same as a financial advisor, so they won’t be able to advise you on how to spend your money or offer any other advice of this kind. Instead, they aim to go deeper, helping you unpick those limiting self-beliefs and supporting you as you fill the gaps in your knowledge.
With terms such as ‘effective annual rate’, ‘loan-to-value’ and ‘compound interest’ it’s no wonder that 77% of UK adults are confused by financial jargon. Six million Brits have racked up late fees due to misunderstanding language, and others have seen a negative impact on their credit scores.
- Read more about how to take care of your financial wellbeing.
Often, you’ll have regular coaching sessions over a certain period of time, so every session offers you this sense of gentle accountability. If you’re prone to putting off anything finance-related, this accountability can help you take action - even when it feels hard. Your financial coach will be with you every step of the way, providing support and encouragement.
Coaches who work in this field often have a background of working in finance, bringing their knowledge of the industry with them into the coaching world. If you’re looking for more specific advice, however, you may want to look into hiring a financial advisor who will be regulated and able to do this.
If you’re in a relationship and have joint finances, you may find it helpful to see a coach together. Getting on the same page when it comes to your finances as a couple can help to ease tensions and ensure you both have shared goals when it comes to your future.
Here are a few areas financial coaches can support with:
- Understanding and changing your relationship with money.
- Unpicking limiting self-beliefs.
- Changing unwanted habits or behaviours around money.
- Setting financial goals.
- Increasing your awareness of your financial health.
- Supporting you to increase your knowledge around finances.
- Understanding financial needs when starting/expanding a business.
To find out more about how a coach could support you, we would recommend reaching out to a coach for an initial consultation. You’ll be able to find out more about them and see if they’re able to help you.
Money may feel like a complex and intimidating force in our lives, but it doesn’t need to be. With the right tools, we can pick it apart, understand it, and make it work for us.
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