Every couple of weeks, we’re asking experts to give us a different perspective on money. Today, Davinia Tomlinson of Rainchq, a company she set up exclusively to help women take control of their financial futures. 💸

What does the word wellbeing mean to you?

For some people, it conjures up thoughts of yoga, meditation and silent retreats in the woods somewhere.

Idyllic though all of this sounds, and let’s not pretend, it’s definitely part of the mix for lots of us, in reality one of the essential ingredients in optimising our overall wellbeing involves getting back to basics and assessing how we manage our money.

Financial wellbeing is like the poor relation of the wellbeing movement, yet the consequences of financial ill-health can be devastating.

In a survey by Perk Box, one in five UK adults described their financial wellbeing as ‘poor’ or ‘very poor’, with 61% citing money as their biggest source of stress.

Notwithstanding the practical implications of money worries, the impact on our physical health is clear: according to Salary Finance, ‘those with financial worries are more than 4.1 times more likely to be suffering from anxiety and panic attacks, and almost 5 times more likely to be suffering from depression’.

The good news is that despite this gloomy picture, small steps can make a massive difference in how you feel overall.

Here are some pointers:

1. Get clear on your goals – Goal-setting is the difference between achieving what you set out to and having no idea what’s going on at all. Knowing precisely where you want to be in your life in 3, 5, 10 years, and importantly what it costs, can help you figure out what the gap is from where you are now and what you need to do to get there.

2. Build a rainy day fund – at the time of writing, we’re in the midst of the Covid19 pandemic, which has caused huge financial strain.  If you were able to save into an emergency savings fund before now then hopefully this will have eased some of the pressure. If you didn’t, please don’t beat yourself up over it – figure out how much you can afford to put away in future and automate it so it’s one less decision you need to make each month.

3. Set a budget…and stick to it – One of the best ways of eliminating financial brain fog is tracking your income and expenditure and assigning it to categories as soon as you get paid. 50/30/20 is a useful framework for this: 50% for your needs, 30% for your wants and 20% savings and investing. There are a ton of online budgeting tools out there so find a system that works for you.

4. Reduce liabilities / increase assets – There are loads of approaches to paying off your debt – you could decide to start with your most expensive debt first, prioritise the one with the highest value, or you could instead choose to target smaller amounts of debt to tick them off your list and give yourself a psychological boost. Whichever one you choose, keep your eye on the prize (financial liberation) and stick with it! And if you haven’t already done so, explore investment options for your money – stock market investing over the long term outperforms cash saving which means your money works harder for you. Hold your nerve!

5. Keep an eye on the long term – This may seem like a snooze, but pensions are still one of the best and most tax efficient ways of saving for your retirement. Even if it feels like a thousand years away, save as much as you can afford to (no amount is too little either so don’t put it off!) and watch it multiply over time.