Tuesday 10 October is World Mental Health Day, an international campaign focused on raising awareness of mental health issues that affect us all at one point or another. The initiative, which the World Health Organisation officially recognises, encourages you to take positive steps to improve your mental health.
Mental health issues are relatively common these days and can arise due to several factors common with expats, including:
- The stress of being a business leader or a senior manager
- The pressures of running your own business as an entrepreneur
- Loneliness because of travelling a lot and spending excessive time away from home and family
- Long working hours.
Financial worries can also be a significant source of mental health issues, and may even exacerbate existing concerns. In fact, Money and Mental Health reveals that those with depression and problem debt are 4.2 times more likely to still have depression 18 months later than those without financial difficulties.
Thankfully, financial planning can be a practical way to resolve some of these mental health issues. So, with World Mental Health Day almost here, continue reading to discover how in-depth financial planning could lift a weight from your mind.
A line of defence against the unexpected can give you some peace of mind
One of the root causes of stress and anxiety regarding your financial situation could be the “what if?” scenarios. These events are usually unexpected, such as a redundancy, accident, or illness, and could result in a financial problem that requires money to solve.
As such, ensuring you have an adequate emergency fund to deal with these events may be prudent. This is essentially a pot of money saved away for a rainy day that should ideally cover at least three to six months’ worth of your family’s household expenses.
A sufficient emergency fund could give you enough money to cover any unexpected expenses and get back on your feet or into employment.
However, you can’t always deal with these “what if?” scenarios with an emergency fund, and one of the primary sources of stress and anxiety may be that you’re unable to provide for your family should the unthinkable happen.
So, it can be sensible to ensure that you have financial protection to act as the last line of defence and ultimately put your mind at rest. There are several different forms of financial protection available.
Ensuring that your family would be financially secure if you passed away is essential. So, having life cover in place can offer immense peace of mind.
Life cover can give you the comfort of knowing that you’ve made the proper arrangements to give your family one less thing to worry about, as they’ll receive a payment to support them if you pass away.
Income protection and critical illness cover
If you become incapacitated due to an illness or injury and can no longer work for an extended period, income protection or critical illness cover could ensure that you’ll receive financial support.
Indeed, income protection will provide you with a tax-free monthly income if you cannot work due to injury, illness, or redundancy.
Meanwhile, critical illness cover will provide you with a tax-free lump sum if you’re diagnosed with a severe medical condition listed on the policy.
Both forms of protection can give you the peace of mind that you won’t use a considerable portion of your savings if you’re unable to work, and that you’ll be able to focus on your own care rather than worrying about financial matters.
Getting in control of your finances could help you feel confident about the future
Financial planning isn’t simply limited to protecting yourself from the unthinkable – it could also help you manage your day-to-day finances and deal with any sources of financial stress.
It’s essential to understand how much you’re spending each month to gain control over your finances. If you’re spending more than you earn, you could be taking on debt to cover the shortfall.
This often snowballs, and your debts can increase due to the high interest rates often charged on credit cards. So, it’s worth putting together a simple spreadsheet that lists your regular monthly outgoings, and then taking note of your monthly income.
On top of this, you can potentially also improve your mental health by actively planning for the future. Having a clear idea of your aspirations can put your mind at ease as you gain confidence that you’re on the right path.
Indeed, possibly one of the most significant future events you’ll face is retirement, so it may be useful to plan for this now. Even if retirement seems a long way off, it’s never too early to start taking the necessary steps that could help you ensure you’ll live your dream lifestyle when you stop working.
To develop your plan for the future, it’s worth asking yourself three questions:
- When do I want to retire?
- What do I want to do when I’ve stopped working?
- How much will it likely cost to maintain my dream lifestyle?
Once you’ve created a plan using your answers to these questions, you can then review it if your circumstances change, reassuring you regularly that you’re in control of your future.
When you’re more confident about your finances and feel that your future is secure, you’ll likely experience less uncertainty, which could in turn help alleviate any feelings of stress, anxiety, or depression.
Read more: 5 simple ideas to help you keep track of your spending
Read more: 3 practical benefits of cashflow forecasting that can help you plan your future
Having a financial adviser in your corner can help you deal with more complicated issues
Above all, working with a financial planner is potentially one of the most effective ways to improve your mental health and dispel any concerns about money.
It can often be complicated to get your finances in order, and it’s easy to make costly mistakes if you go it alone. Meanwhile, financial advisers are qualified experts in their field, so you can be certain you’re getting the right advice for your situation.
Simply having someone to discuss your financial issues with can help you avoid bottling up your problems and lift a considerable weight off your shoulders.
To find out how we can help you, contact us by email or, if you prefer to speak to us, you can reach us in the UK on +44 (0) 208 0044900 or in Hong Kong on +852 39039004.
Please note
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions.
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