Tired of feeling stressed out about your finances?

According to recent research (PwC Irish Consumer Insights Pulse Survey, 2023), almost half of Irish consumers are concerned about their personal financial situation.

Financial wellbeing is an important part of our overall wellbeing, yet it’s often overlooked.

The good news is that improving your financial wellbeing doesn't have to be an overwhelming task. There are lots of positive steps you can take to move in the right direction, like reviewing your finances and tracking your spending to see how your day-to-day money management can be improved. And setting aside money for your future or unexpected expenses or getting a financial plan to help you take the right steps.

Whatever stage of life you’re at, it's never too late to adopt new financial habits and boost your financial wellbeing. But what exactly is financial wellbeing? 

What is financial wellbeing? 

Financial wellbeing means having control over your day-to-day finances and being able to save for the future. It’s being prepared for the unexpected and having the money or plans in place to handle a surprise expense or a loss of income.

Simply put, financial wellbeing isn’t just about having money, but also about having a sense of security and stability.

Why financial wellbeing matters for your mental health 

Money worries can have a big impact on your mental health. Feeling low or anxious is a normal response if you’re struggling to pay the bills or have a large expense looming over you. You could be losing sleep if you’re worried about how you will afford it all.

Thankfully, there are many small steps you can follow to improve your financial wellbeing, even in times of inflation. Sometimes, simply knowing what changes to make can help to ease those worries and take a load off your mind.

What can I do to improve my financial wellbeing? 

If you’re experiencing money worries or you just want to feel more in control of your finances, here are seven things you can do to help manage your money better.

1. Create a budget 

The first step on the path to financial wellbeing? Create a budget! Use a budgeting tool such as the one below to get a clear picture of your overall finances.

By tracking your income and expenses each month, you can then identify areas where you may be overspending and see where you can make some changes.

Use this step-by-step budgeting sheet to get a snapshot of your current spending and check out the 50/20/30 rule to help you hold on to your hard-earned money.

2. Set financial goals 

Having clear financial goals can motivate you to save and help you stay on track. Start with short-term goals, like or saving for a holiday or building an emergency fund (learn more on this below!) and work towards long-term goals, like buying a house or retiring comfortably.

3. Review your benefits and existing financial products  

If you already have pension and insurance plans set up, get familiar with what you have in place already. If you’re working, you may have employee benefits through your employer. And a big question to ask yourself is: is my income fully protected?

How much of your income is protected if you were unable to work because of an illness or injury while employed, for example? You may have income protection as part of your employee benefits package with work, so checking in with your HR team can help clarify what you have already. If not, this is one of the areas that a financial advisor can cover with you in a financial review.

4. Save when you can 

Do you have an emergency fund in place so that if things went wrong, you would have short-term access to funds? As a general rule of thumb, it’s a good idea to have three months’ salary in your emergency fund. This might not be possible for everyone right away, so you could start with a smaller amount, give yourself a pat on the back, and then keep building on it. It gives you the security that if your car needs repairs or your boiler breaks down, you have the financial buffer to take care of it.

There’s no denying that the cost of living crisis has made it harder to save, but if you do have extra money the day before payday, saving it for a rainy day could be a great boost to your financial wellbeing. Better yet - have a direct debit set up so it goes out on payday. If you don't see it, you won't spend it.

5. Invest in your future 

A key part of financial wellbeing is having a plan for retirement. Regularly adding money to a pension can help you feel in control and reassured that you'll have enough funds to live comfortably when you retire.

According to the annual pension coverage report from the Central Statistics Office (CSO), one in three workers in Ireland doesn’t have a private pension set up. And if you’re thinking of relying on the state pension, it’s worth knowing that as of May 2023, it’s just €265.30 per week (at most).

A private pension could help ensure you have the retirement you want. It’s a clever way to save for your future as you get tax relief on your contributions. Your contributions are invested and any investment gains you make grow tax-free. So you can use your pension to save up money and give yourself an income after you retire. You will have to pay tax on this income when you draw it down.

And if you have a company pension, you could take advantage of additional voluntary contributions (AVCs). AVCs are essentially any extra money you contribute to your usual pension scheme. You can qualify for income tax relief at your marginal tax rate when you make these extra contributions.

If you’re unsure how much money you should save for retirement or which retirement plan is right for you, a financial advisor can help you understand your options so you can make an informed choice.

6. Review your financial protection, or get set up with some  

Having the right arrangements in place to help your family manage a financial shock like suddenly losing your or your partner’s income due to a serious illness or death can provide peace of mind if the worst happens.

Things like income protection and life insurance are invaluable in these situations as they can help support your family’s finances until things are back on track. Or if you already have insurance plans in place, like mortgage protection, it’s worth reviewing them with a financial advisor to make sure your plan is still right for you.

7. Get financial advice 

At Irish Life, our financial advisors can help you identify areas of your life where you can make changes to improve your financial wellbeing. Your financial advisor will look over all aspects of your finances with you.

They’ll cover everything from your income and assets (like your savings or any investments) to your expenses and liabilities (like debt or a mortgage). They'll work with you to find areas where you could improve your financial wellbeing. Depending on your goals, they can cover your life insurance, pension and investment needs in the review to ensure you’re on track for the future. You can also do this online yourself to get a financial plan.

Improving your financial wellbeing can take a bit of time and effort, but you can get free financial advice and support to help you make the right choices for you and your family.

By taking small steps and building good habits, you can feel more in control of your finances and help to alleviate money-induced stress and anxiety. Who doesn’t like the sound of that? 

Remember, financial wellbeing is a continuous process, and it's never too late to start. So, take the first step today and book an appointment with financial advisor to find out what changes you can make to improve your financial health.