We all know it’s good to talk. But how often do you sit down with your nearest and dearest and really have a heart-to-heart about all things financial? Rarely, if ever, is my guess. It’s time to change that though. This #TalkMoneyWeek, make a start with these three straightforward conversations we should all be having.

1. The honest conversation ….with yourself

First up, make sure you get things straight with yourself. Think about where you’re at financially. Afterall, complete no holds-barred transparency is the best way forward. Be honest with yourself about how much you earn, what you owe and where your money goes.

A great way to do this would be to use our new Financial wellness tool. It only takes five minutes to answer a few simple questions and  get a clearer understanding of your finances in four key areas - budgeting, managing debt, building savings, and protecting your money. 

You’ll be given a financial wellness score as well as helpful tips on ways to increase that score and put yourself in a better position - now and in the future. 

2. The ‘what if’ conversation

Reinforcing our resilience to unforeseen events is good for both our financial and mental health. For instance, like saving for the proverbial ‘rainy day’. This helps keep anxiety around your finances in check and ensures you have access to money tomorrow, should you need it, while also keeping you a step ahead when it comes to looking after your financial future.

Noticing where we’re struggling and recognising our emotional response to situations we once ‘handled’ without a second thought, can also help us maintain some all-important control and stability while we deal with the day-to-day. So can ‘regulating’ our finances.

Just by adopting a positive savings habit, where you invest a small sum on a regular basis, you remove some of the worry about not saving enough (or at all) and the anxiety that inevitably comes with trying to pick the ‘right’ moment to invest a larger amount. Read more on how you can build more positive financial wellbeing habits for life.

Let’s face it, none of us know what is around the corner. But for your own financial wellness and your mental health, taking positive steps now will boost your resilience, come what may.

As Mind, the mental health charity knows all too well, poor mental health can make earning and managing money harder. And that is why talking about money worries is so important.

If you, or someone you know is struggling with financial problems, there are charities you can speak to, such as MoneyHelper (formerly known as the Money Advice Service) on 0800 138 7777, National Debtline on 0808 808 4000 and StepChange Debt Charity on 0800 138 1111, all for free.

For further help with mental health issues Mind, the mental health charity, has comprehensive guidance on where and how to get the help you need.

3. The future you/us conversation

We all save best when we have a purpose. Whatever the end-goal - be it retirement, a wedding, school fees, a new house, or even just building up our contingency for unexpected events - knowing your goals maximises your chances of achieving them.

And don’t put the future on hold for too long. With the increased cost of everyday items, it’s tempting to cut back on your longer-term savings and investments ‘for now’. Just be really careful that ‘for now’ doesn’t end up lasting far longer than absolutely necessary though.

As a general rule of thumb, you be should be aiming to save 13% of your annual household income to maintain your current living standards in retirement. But according to Fidelity research, over half (52%) of the people surveyed had ‘no idea’ how much they will need to live off once they retire ¹.

This leads us to the million dollar question - are you paying enough into your pension?

One of the best ways you can make sure you are, is by maxing out your company pension contributions. Now that employers have to add to the pot, they’re even more worth your while, giving you additional money from your employer, over and above your salary. It might not put more pounds in your pocket right now, but it's extra money that your employer is giving that future you will benefit from.

If you want to understand more about how much you should be saving, or what that means for your retirement pot, you can use our retirement savings tools and calculators to find out.

The Government’s Pension Wise service offers free, impartial guidance to help you understand your options at retirement. You can access the guidance online at  www.moneyhelper.org.uk or over the telephone on 0800 138 3944.

Sources

The Fidelity Global Sentiment Survey, 2023 - The data collection, research and analysis was completed in partnership with Opinium, a strategic insight agency. Data collection took place between in July 2023 and includes a sample of 1000 UK adults.

Important information: The value of investments can go down as well as up, so you may get back less than you invest. Currently, you cannot normally withdraw money from your pension until you are 55 (this is due to rise to 57 in 2028). This information is not a personal recommendation for any particular product, service or course of action. If you are unsure about the right approach for you personally, you should consider speaking to an authorised financial adviser.

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