This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, it is subject to change and we are not responsible for any errors or omissions.
A lot has been written about how financial planning can help with wealth building and preservation. However, it can also be valuable from an emotional, relational and psychological perspective – helping to create and sustain lives which (according to the Mental Health Foundation) are “comfortable, healthy or happy.”
Yet, how does financial planning help with wellbeing? Below, our financial planners explain some of the key links between money and the mind. We discuss how a long-term plan can help with peace of mind, positive living and mental health.
We hope these insights are useful. If you want to discuss your financial plan with a member of our team, please get in touch to arrange a no-obligation financial consultation, at our expense:
+34 966 460 407
info@scottsdale.eu
What is financial wellbeing?
The UK government even recognises the key role that financial planning can play in fostering a happy citizenry. The Money and Pensions Service calls this link “financial wellbeing” and defines it as “Feeling secure and in control of your finances, both now and in the future”.
Intuitively, the link between money and mental health is not hard to spot. If you are worried about how you will pay the bills, it is enough to make many people suffer anxiety and sleepless nights. The problem is also widespread and not just limited to those in poverty.
The Money Advice Trust identifies 24.9 million British people (47% of the adult population) who are worried about their finances in 2024. A similar figure do not feel confident managing their daily finances, and 36% say they feel worried when they think about their finances.
Financial wellbeing contrasts strongly with these negative feelings and psychological states. Rather than believing you are disempowered, you have a strong sense that you are largely in control of your money. You sense that you are progressing towards your long-term goals one step at a time. Rather than feeling alone in your money struggles, you feel supported.
How financial planning helps
Have you ever experienced that wonderful feeling after you write down a monthly budget and realise that you could sustain your lifestyle and set money aside for the future? If not, start by simply listing your monthly income and expenses.
Check over your bank statements to get a truly accurate picture and take stock. The emotions people will feel at this stage will vary. Some will be pleasantly surprised at their financial discipline. Others might be shocked at some of their needless spending.
The point of the exercise is not to shame, but to help you gain clarity about your financial position. Where do you currently stand? This will be crucial in determining the “distance” to your goals (e.g. saving for a house or retirement).
Financial planning takes this exercise to a whole new level. It goes beyond budgeting and looks at where you hope to be in 10, 20, 30 years or more. Where do you see yourself in the future? How will your choices today help you get there?
This can be intimidating to some people. We might not like the idea that our present choices influence our future wealth and success. However, if we look at it more positively, this realisation is very empowering. Our lives are not simply shaped by forces outside our control. We have a say in how our “stories” pan out.
Getting started with a financial plan
At Scottsdale, we often find it helps to ask clients what their goals are. What do you dream of when you close your eyes? What are you doing in the future? Who are you with? What does your lifestyle look like?
Some of our dreams are likely to be unrealistic. Yet many of them are potentially realisable. Perhaps you really could retire earlier than 68. Maybe you could be mortgage-free sooner than you expect. Or, maybe your children could inherit a better legacy than you currently believe.
Allowing our minds to drift to hopes and aspirations like these can be exciting and motivating. With our destinations in mind, how do we get there? This is where it is necessary to examine our current positions. This means listing income, expenses, assets and liabilities to help determine the “distance” between where we stand and where we hope to arrive.
A financial planner can help you with this entire process. By discussing your hopes and goals for the future, you gain expert wisdom about what might truly be possible for people in your situation (e.g. British expats). An expert can also assist with the important work of examining your current financial position, putting together a thorough analysis to illuminate areas of opportunity and risk that you may not have previously considered.
Invitation
If you are interested in discussing your own financial plan with us, please get in touch to arrange a no-commitment financial consultation at our expense:
+34 966 460 407
info@scottsdale.eu