5 tips for overcoming financial anxiety 30% o …
Over the past year, many have seen their financial situation change. With that in mind, Shawbrook Bank conducted a study that revealed British concerns and concerns about personal loans, secured loans and understanding “financial jargon”.
According to the report, 59% of Britons agree that the language used in personal loan applications and documents is difficult to understand. More than one in two Britons said it would prevent them from applying for a personal loan.
Initial assumptions about acceptance of particular groups also caused financial anxiety. The report found that one in three Britons don’t know whether self-employed people can be approved for a mortgage.
There are a number of ways to better prepare for your finances. Sally Conway of Shawbrook Bank provides five helpful tips that may help overcome and prevent financial anxiety.
1. Make a budget and stick to it
Budgeting is necessary to fund long-term efforts. Knowing the cash flow and the total amount spent is important when you plan to invest in a property or take out a loan.
All expenses should be included, yes even take out, to make sure every transaction is accounted for. When this is done, it is easy to see if more money is coming out than it is going in. If so, it would be best to try and cut unnecessary expenses.
Budgeting can seem daunting at first, but if it’s realistic it can be done. Keeping track of all expenses makes it easy to find where to cut back.
By budgeting properly, more Britons will feel in control of their finances and on their way to financing their dream property.
2. Learn about everything related to finance
Anxiety usually arises because of fear of the unknown. By learning about mortgages, personal loans, and secured loans, the application process will be much easier.
According to the study, one in three people were unsure of their credit rating. If they had found out their credit score before, they would have been better informed about the amount a lender would lend.
The study also showed that 34% said they would search for terminology they were unsure of on Google. If more people were to research what these unfamiliar terms mean, maybe it could reduce their anxiety as they would be more familiar.
Learning about financial products and money management makes people better prepared and more confident.
3. Ask for help or talk to your friends and family
The study showed that only 6% said they would not ask anyone for help, indicating that the majority did. Talking to friends and family can help. Maybe there are family or friends who have taken out a loan or taken out a mortgage before. Maybe they’re new to it too. The only way to find out is to ask.
If you prefer to keep financial data confidential, this is also available. There are independent organizations that are there to help you if financial advice or help is needed.
4. Start building an emergency fund or buffer
One thing everyone has learned from Covid-19 is that the future cannot be predicted. Building an emergency fund or buffer can help prepare if something unexpected happens. Three months’ worth of income is generally recommended.
5. Shop around and do your research
There are many financial products to choose from, so it is important to consider all of the options before committing to one. It is essential to research first what each financial product has to offer before signing the dotted line.
Financial anxiety, which some Britons experience in these uncertain times, can be overcome by implementing these five tips. Homeownership is a goal for many people, but by researching, creating an emergency fund, getting advice, learning about finances and budgeting, it can be done.
Every day, financial habits can be changed to put many people in a better position to buy property. Whether the plans are around the corner or in a few years, you better be prepared.