Research released today to mark National Stress Awareness Day reveals how the nation’s emotional relationship with personal finance is downright weird.
The findings counterintuitively show that the week the nation is most flush with cash is also the week the nation starts getting financially stressed, with nearly a quarter (24%) starting to have feelings of worry towards their bank balance the week right after payday. Extraordinarily, over one in seven (14%) cited payday itself as the day they begin to worry about their finances for the month ahead.
When it comes to revealing personal wealth, the nation is similarly emotionally eccentric, with nearly two fifths of us (39%) preferring to be caught by a stranger in an embarrassing situation such as having sex, falling over, or falling asleep in an important meeting, rather than a stranger being privy to how much money is in our bank account. And it’s not just strangers we’re shy of talking truthfully to about our finances: over 3 million Brits admit to having lied to a partner about how well-off they are in the last three years alone.
The study exploring the relationship between UK adults and their bank accounts was commissioned by Atom, the UK’s first digital bank, in association with charity The Stress Management Society. The research combines a survey conducted by YouGov of over 2,000 UK respondents alongside a series of psychological and physiological experiments that tracked people’s reactions to their money throughout the month.
Despite financial fear being a common cause of anxiety and stress related health issues, over a third (35%) of UK adults would rather do arduous household chores than spend time making a budget to help alleviate their money worries.
Chief Executive of Atom Bank, Mark Mullen, said: “It’s clear from the research that the UK’s relationship with money is in need of some couples’ therapy. Fortunately, banking apps like Atom will hopefully help reduce the stress when we launch Current Account in 2017. Our products and services are designed to fit around our customers and the way they live their lives, however eccentric. It’s why we’re a digital only bank, on a mission to help UK customers take back control of their money.”
With 85% of people unaware of the exact amount that is in their current account at any given time, and over a third (34%) of people feeling stressed, worried or anxious when thinking about budgeting, the UK appears to be in dire need of a new way of managing its money.
The financial jargon that accompanies financial products and planning isn’t helping the UK get to grips with its money either, as a quarter (25%) of UK adults admit they don’t understand how interest rates are calculated and 76% of millennials could not fully comprehend simple financial terms listed such as ATM, ISA and Direct Debit.
Neil Shah, Founder of The Stress Management Society & Author of The 10-Step Stress Solution commented: “Money is a big cause of stress and anxiety issues in today’s society and although people think that ignoring their money or pretending they don’t have a bank balance helps, it really doesn’t! However, going into a bank to discuss finance matters can seem quite daunting and gives you even more reason to hide. It’s great to see financial services evolving to try and simplify banking and make money less scary – all helping our mission to combat stress and anxiety.”
The scientific experiments, which used HeartMath technology to measure heart rate, combined with scientifically monitored psychological assessments, also revealed that the week before payday was when participants found it most difficult to engage with physical money, with 7 in 10 participants admitting to feeling serious levels of anxiety about having to withdraw cash from an ATM, saying it would make them feel awful, anxious and stressed.
Atom and The Stress Management Society’s Top 10 Tips for Reducing Financial Stress
- Don’t hide!
Our study found that people avoid checking their balance closer to payday, but it’s better not to avoid your finances. Becoming more aware of your balance and spending habits can help you stay in control and avoid financial problems before they get worse.
- Set a budget
We all know budgeting is a difficult task to stick to, but sitting down to go over your income and expenses can help lower your financial stress level. Ensure regular budget check-ups – this is essential.
- It’s all about priorities
Determine what your financial priorities are. Identifying them can help ease a tough financial situation – create an action plan.
- It’s the little things that count
Use ‘the snowball effect’ to make incremental changes to your day-to-day spending so you can tackle your financial priorities. Cut back on lattes or quit smoking, cut back on takeaways and put the savings towards one small debt to get it paid off faster, and then repeat for others. Atom’s App will allow users to make alerts and goals tailored to their specific spending habits.
- Money Buddy
Similar to a gym buddy, find a responsible and trusted friend that can help you follow your financial goals – helping you to stay accountable.
- Consider using cash
It may be old fashioned to pay with cash but people who pay by card are unconsciously willing to spend more and have less control over their spending – the emotional attachment to cash can help curb mindless spending.
- See an advisor
Set up an appointment with a financial advisor. Let them help you create the right path to your financial goals whether that is to start investing, save more for retirement or to simply define your aspirations.
- The fear of missing out
Social media can be a hugely influential platform that encourages a desire to live a wealthy lifestyle – fancy meals, expensive holidays and new cars – this can take a big toll on your financial stress. Stop comparing yourself to others. That picture/video is a magnified part of their life or may not even be true. Concentrate on yourself and gain control of your own situation.
- Turn the unknown into “knowns”
Knowledge is key with financial responsibility. If you want to save money but have no idea of where to start – do your research, attend local or online finance classes or seek advice and support on the best financial options. The government's Money Advice Service is a useful and free support resource.
- Stay positive
A negative attitude and perspective on your finances will do nothing but further your financial stress. Focus on the positive – keep a positive mental attitude – it can calm your fears and help you recognise your financial strengths, but if you are worried, you should ask for help.
