Managing Debt for better mental health

In today's fast-paced society, financial stress has become one of the leading contributors to mental health issues. The debt burden can weigh heavily on individuals, causing anxiety, depression, and even addiction. However, by taking proactive steps to reduce debt and improve financial health, it is possible to alleviate the mental toll that debt can have.

Proactive Steps to Reduce Debt and Improve Mental Health

Dealing with debt can be overwhelming and stressful, but taking proactive steps to manage it can not only improve your financial situation but also have a positive impact on your mental health. Here are some additional strategies and insights to help you on your journey toward debt reduction:

1. Prioritize your debts strategically:

While it's important to pay off all your debts, it can be beneficial to prioritize them strategically. Consider focusing on high-interest debts first, as they tend to accumulate more quickly. By tackling these debts first, you can save money on interest payments in the long run. However, it's also essential to maintain minimum payments on all your debts to avoid penalties and late fees.

2. Explore debt snowball or avalanche methods:

The debt snowball method involves paying off your smallest debts first, regardless of interest rates. This approach can provide a sense of accomplishment and motivation as you eliminate smaller balances one by one. On the other hand, the debt avalanche method focuses on paying off debts with the highest interest rates first, potentially saving you more money in the long term. Consider which method aligns better with your financial goals and personality.

3. Seek professional advice:

Managing debt can be complex, and seeking professional advice can make a significant difference. A financial advisor or credit counsellor can help you develop a personalized debt repayment plan based on your unique circumstances. They can provide insights into budgeting, negotiating with creditors, and exploring debt consolidation options.

4. Implement lifestyle changes:

Reducing debt often requires making lifestyle changes and adjusting your spending habits. Take a closer look at your monthly expenses and identify areas where you can cut back. This might mean reducing discretionary spending, finding more affordable alternatives for everyday items, or even downsizing your living arrangements temporarily. While these adjustments may be challenging in the short term, they can have a substantial impact on your debt repayment efforts.

5. Build an emergency fund:

Unexpected expenses can derail your debt repayment progress. By setting aside some money each month into an emergency fund, you can create a financial safety net. This fund can help cover unforeseen costs, such as medical bills or car repairs, without resorting to credit cards or taking on more debt.

6. Celebrate milestones along the way:

Reducing debt is a long-term journey, and it's essential to celebrate your achievements along the way. Set milestones for yourself, such as paying off a specific debt or reaching a certain amount of debt reduction. Rewarding yourself for reaching these milestones can provide motivation and reinforce positive financial habits.

Remember, managing debt takes time, patience, and perseverance. By implementing these strategies and staying committed to your financial goals, you can reduce your debt and improve your mental well-being in the process.

How to Create a Budget to Help Manage Your Debt

Creating a budget is one of the most critical steps towards managing debt effectively. A budget allows you to track your income and expenses accurately, giving you a clear understanding of where your money is going. When creating a budget to help manage your debt, consider the following:

Start by listing all your sources of income, including your salary, investments, or side hustles. Determine the total amount you earn each month.

When listing your sources of income, it's important to consider all possible avenues. This may include not only your primary job but also any additional income streams, such as rental properties or freelance work. By including all sources of income, you'll have a comprehensive view of your financial situation, allowing for more accurate budgeting.

For an accurate tally of your monthly earnings, especially if you're juggling multiple income streams or freelance work, utilizing a paystub creator can simplify the process, ensuring every dollar is accounted for in your budgeting.

Next, identify your fixed expenses – these are expenses that recur every month and remain relatively constant, such as rent or mortgage payments, utility bills, and insurance premiums.

Fixed expenses are the backbone of your budget. They are the regular payments you make each month that are necessary for maintaining your lifestyle. It's important to carefully consider these expenses and ensure they are accurately reflected in your budget. By doing so, you'll have a clear understanding of the minimum amount you need to cover each month.

Take into account your variable expenses – these are expenses that may fluctuate from month to month, such as groceries, transportation, entertainment, and dining out. Be sure to allocate a realistic amount for each category.

Variable expenses can be more challenging to budget for since they can vary from month to month. It's important to review your spending habits from previous months to get an idea of how much you typically spend in each category. By allocating a realistic amount for variable expenses, you'll have a better chance of sticking to your budget and avoiding unnecessary debt.

With a clear understanding of your income and expenses, calculate how much you can afford to allocate towards debt repayment. Prioritize this amount in your budget and make it a non-negotiable expense.

Debt repayment should be a top priority when creating a budget to manage your debt effectively. By allocating a specific amount towards debt repayment and making it a non-negotiable expense, you'll ensure that you're actively working towards reducing your debt. It's important to be realistic in your calculations and avoid overcommitting yourself, as this could lead to financial strain.

Track your spending diligently and make adjustments as necessary. Be mindful of any unnecessary expenses that can be eliminated or reduced to free up additional funds for debt repayment.

Tracking your spending is an ongoing process that requires discipline and awareness. It's important to regularly review your budget and make adjustments as necessary. By being mindful of unnecessary expenses, you can identify areas where you can cut back and allocate more funds towards debt repayment. Small changes can have a significant impact on your overall financial health.

Creating a budget may initially seem daunting, but it is an essential tool in managing debt effectively. By tracking your expenses and prioritizing debt repayment, you will be taking positive steps toward better financial health and improved mental well-being.

The Impact of Poor Money Management on Mental Health

Poor money management can have a significant impact on mental health. The stress of living paycheck to paycheck, being overwhelmed by debt, or constantly worrying about financial stability can lead to various mental health issues.

One of the primary consequences of poor money management is increased stress. Constantly worrying about money can lead to anxiety, sleep disturbances, and even panic attacks. Financial stress can also strain relationships, as it often leads to arguments and tension between partners or family members.

Moreover, the impact of poor money management goes beyond just the immediate stress. It can have long-term effects on an individual's mental well-being. For instance, the constant struggle to make ends meet and the inability to save for the future can create a sense of hopelessness and despair. This feeling of helplessness can contribute to the development or worsening of conditions like depression and chronic anxiety.

Additionally, poor money management can contribute to feelings of guilt and shame. Individuals may feel inadequate or irresponsible for their financial situation, resulting in low self-esteem and a negative self-image. These emotions can further exacerbate mental health conditions such as depression and anxiety.

Furthermore, poor money management often leads to a lack of financial security, making individuals vulnerable to unexpected emergencies or financial crises. The fear of not being able to cover essential expenses or facing insurmountable debt can be overwhelming, leading to feelings of hopelessness and despair.

It is important to recognize the impact that poor money management can have on mental health and take steps to mitigate these effects. By actively working towards improving financial literacy, seeking professional advice, and taking control of your finances, you can improve both your financial well-being and mental health.

Improving financial literacy is a crucial step in managing money effectively. Understanding concepts such as budgeting, saving, and investing can empower individuals to make informed financial decisions. By educating oneself about personal finance, individuals can gain the confidence needed to take control of their financial situation.

Seeking professional advice can also be beneficial for those struggling with poor money management. Financial advisors or credit counsellors can provide guidance on budgeting, debt management, and creating a financial plan. These professionals can help individuals develop strategies to improve their financial situation and reduce the stress associated with money management.

Furthermore, taking control of your finances involves developing healthy financial habits. This can include setting realistic financial goals, tracking expenses, and creating a budget. By implementing these habits, individuals can gain a sense of control over their financial situation and reduce the anxiety and stress associated with poor money management.

In conclusion, poor money management can have a profound impact on mental health. The stress, guilt, and insecurity that come with financial instability can lead to a range of mental health issues, including anxiety, depression, and even panic attacks. It is crucial to recognize the importance of financial well-being and take proactive steps to improve money management skills. By educating oneself, seeking professional advice, and developing healthy financial habits, individuals can enhance both their financial situation and mental well-being.

The Benefits of Good Financial Health for Your Mental Health

On the other hand, striving for good financial health can have significant positive effects on mental well-being. When individuals feel in control of their finances and have a solid understanding of their financial situation, they experience reduced stress and improved psychological well-being.

One of the primary benefits of good financial health is increased peace of mind. Knowing that you have an emergency fund in place, are saving for the future, and are actively managing your debt provides a sense of security and stability. This certainty helps reduce anxiety and allows individuals to focus on other aspects of their lives.

Good financial health also promotes a sense of empowerment and self-confidence. Taking control of your finances and achieving financial goals fosters a positive self-image and a belief in your ability to overcome challenges. This increased self-esteem positively impacts overall mental well-being and contributes to a higher quality of life.

Beyond the individual, good financial health can also improve relationships and social connections. Money is often a source of conflict within partnerships and families. By managing finances together, openly communicating about money matters, and working towards shared financial goals, relationships can be strengthened and trust can be cultivated.

The benefits of good financial health extend beyond mental well-being. Being financially stable allows for greater freedom and flexibility in career choices, lifestyle decisions, and the ability to pursue personal passions and interests. This overall sense of fulfilment and happiness further enhances mental health and overall life satisfaction.

In conclusion,

managing debt effectively is crucial for maintaining good mental health. By taking proactive steps to reduce debt and creating a budget to manage finances, individuals can alleviate the stress and anxiety associated with financial burdens. The impact of poor money management on mental health is substantial, but by striving for good financial health, individuals can experience improved mental well-being and a higher quality of life. Don't let debt control your life – take control of your finances and prioritize your mental health.

One trigger for mental health issues that is well-known, though, is financial stress. If you think your bank balance could be affecting your well-being, you’re not alone! Let’s dive into the link between money and mental health and look at some coping mechanisms for when your finances overwhelm you.

Can Financial Stress Affect Mental Health?

Over 1.5 million people in England are currently experiencing problems with both debt and mental health. It’s incredibly common for the two to be interlinked, with money issues often leading to a decline in mental wellbeing.

The burden of financial strain is tough on the mind, with many triggers causing increased stress, anxiety, and feelings of depression. For example, some people may find receiving letters causes them severe anxiety as they dread finding financial statements or debt collection reminders. Others may find that viewing their spending or bank balance creates feelings of depression. Almost 40% of people between 40 and 50 lose sleep over finances, which can lead to a whole host of mental health problems, and many people feel isolated when they can’t participate in social events due to a lack of money.

All of these are examples of financial stress affecting well-being, but they’re just a handful. There are countless other ways that people find their money impacts their mental health, creating a whole host of problems.

But what about the other way around? It’s clear that financial stress can impact mental health, but can mental health impact financial stress?

Mental Health Issues Can Cause Financial Stress

Unfortunately, the pattern does go both ways. Those suffering from mental health issues can often lose track of and become overwhelmed by their financial situation. A lack of good stress management caused by their mental health leads to a range of financial triggers creating huge emotional responses. So, a vicious cycle begins: your mental health makes you unable to deal with your finances, which increases your financial stress, which creates more mental health problems.

For example, people who suffer from depression often struggle to find the motivation to deal with their finances. Those with anxiety may see their finances as a trigger, whilst those with mania may find themselves making impulsive decisions about spending that they later regret. The fact that people with mental health problems are three and a half times more likely to be in debt than those without shows just how debilitating these issues can be.

Why Does Mental Health Lead To More Debt?

When looking at the link between money and mental health, you can’t ignore the impact that well-being can have on finances. The gap between earnings for those with mental health problems and those without is large, and sometimes people with depression, PTSD, anxiety etc. simply can’t work.

When they don’t have the income to sustain a safe, healthy life, their financial situation becomes worse. Again, this becomes a vicious cycle that’s incredibly hard to break out of, with many ending up in deep financial trouble.

Understand Your Responses To Finances

Fortunately, there is plenty of hope for people suffering from mental health and financial stress. By understanding your own emotional relationship with money, you can better grasp what’s going on. Do you:

• Feel overwhelmed looking at your bank balance?
• Avoid opening letters or answering phone calls to do with your finances?
• Impulsively spend money and later regret it?
• Feel ashamed of your financial situation but struggle to ask for help?

Feelings of guilt, stress, anxiety, fear and fatigue are all signs that your financial situation could be affecting your mental health - or the other way around. Once you identify that you might have an issue, you can start to take steps to address it. Let’s take a look at some of these now.

1. Speak To Someone You Trust

As with so many mental health concerns, speaking to someone is vital. Make sure you confide in someone you trust, explaining how your financial situation impacts your mental health. They can then help you to find financial support, go through your finances with you, or simply be someone who can listen when your money is getting you down.

2. Speak To A Financial Advisor

Financial advisors are the superhumans of the money world! By teaching you how to manage your money, sorting your finances, and helping you get out of financial trouble, they can relieve your stress and get you back on your feet.

3. Address Your Mental Health

If your mental health is taking a toll on your finances, you must address the cause before the consequence. Reach out to a GP or therapist who can begin the process of improving your mental health. Stress management could also aid in controlling your emotional responses, taking the pain away from dealing with your finances.

Final Words

The link between money and mental health is clear, but it doesn’t mean that you have to suffer. By finding support using the methods in this article, you can take control of your bank balance and your mind, turning money into something you feel confident in dealing with.

In light of this, Stephen Holliday, CEO and Founder of Level, delves into the connection between money and mental health.

At Level, we have long understood that money worries and mental health are inextricably linked. But while physical and mental health strategies are firmly at the top of the agenda, financial wellbeing has somewhat lagged.

We are currently in the midst of a cost-of-living crisis, that has left many wondering how they will make ends meet. It is only natural that a person’s mental health might suffer, with the added strain of rising fuel, mortgage and food bills.

Though it is an improving picture, Brits have long had a ‘stiff upper lip’ mentality when it comes to money, in some way contributing to the loneliness that is under the spotlight during Mental Health Awareness Week 2022.

But what are the practical measures that employers can take to help their staff manage their money better and, in turn, help ease a considerable burden on their mental health?

Establishing a savings culture is perhaps the clearest way that businesses can support their workforce. The Money & Pensions Service, in its UK Strategy for Financial Wellbeing, states that “a financially healthy nation is good for individuals, businesses and the economy”. To highlight this, establishing an environment where people can save more is one of the five key pillars of the strategy.

Establishing a savings culture is perhaps the clearest way that businesses can support their workforce.

But as we set out before, businesses have been slower to adopt financial well-being solutions than physical or mental health. There are certainly reasons behind this: subsidised gym memberships or cycle to work schemes are commonplace because the impact on staff is measurable – unlike financial health, which is far less tangible.

Employers have been turning to content (such as advice and top tips), often shared on an intranet or other means of internal communication, to help their staff manage their money. This piecemeal approach does little to move the needle.

We have seen first-hand the real impact that salary-linked savings schemes are having on workers across the UK, helping them build a buffer to cope with unexpected bills, but also times of economic hardship, the likes of which we are currently experiencing.

As a result, employers must step up to their responsibility and offer the sorts of services that make it easy for their staff to set money aside, much like with auto-enrolment pension schemes. This is a measurable benefit to the staff, but also to the business. Solutions that support financial wellbeing are proven to boost attraction and retention. Better still, they are simple to put in place for both the employee and employer, meaning a frictionless experience for both parties.

We are calling upon all employers to take these simple steps to support their workforce. Money problems can be a cause of great loneliness for many. Employers must recognise the role they play.

Over 76% of employees in England’s capital would be prepared to resign from their current role to avoid travelling into the office. Covid safety concerns on public transport play a key role in the findings, with 60% of those surveyed citing the commute as a major obstacle to their safe return to the workplace and 44% of those surveyed saying they would quit their current job because of it. 

38% of employees in the UK said the length of their commute was a reason to quit, while 29% said the cost of travel was to blame. Meanwhile, 36% of those surveyed pointed to the toll commuting takes on their mental health. 

Outside of the capital, 54% of employees are considering resigning due to the commute. 

Younger workers in particular are less willing to commute to work. The survey found that 70% of Generation Z and Millennials said they would quit if the commute did not suit their lifestyle. 

Being faced with long-term illness or disability is incredibly stressful, and can cause serious implications for your finances. For those who have become financially vulnerable due to ongoing illness, or are looking for ways to plan for unexpected circumstances, business growth consultant Daniel Groves has compiled some the resources that can help.

Sick Pay

The first avenue for most people facing illness, injury or sudden disability is going to be sick pay from your employer. Check your employment handbook for details about the policy at your workplace, and communicate (in writing) with your employer’s HR department if they have one.

If there is no specific policy or insurance coverage at your workplace, you can claim Statutory Sick Pay (SSP) as long as you are employed but unable to work and earning an average of at least £120 a week. The current SSP rate is £95.85 a week. If your employer is refusing to pay SSP (or refusing to pay the full amount), contact the HMRC statutory payment dispute team.

When you think you are able to return to work, remember that you can ask your employer for accommodations to help you perform your job safely and comfortably. For example, requesting non-standard equipment that’s adapted for your physical needs.

Legal Compensation

Not every instance of sickness or injury is going to have a legal route to pursue, but if you’re suffering as a result of someone else’s actions (or negligence), you may be entitled to financial compensation.

For example, it’s compulsory for UK workplaces to have Employers Liability Insurance in case of accidents and injuries. Even if you feel partially responsible for an incident, you may be eligible for compensation if your employer is deemed to be mostly at fault, or has failed to follow Health & Safety regulations. In addition to claiming from your employer’s insurance, you may be eligible for Industrial Injuries Disablement Benefit, depending on the severity of your condition.

It’s compulsory for UK workplaces to have Employers Liability Insurance in case of accidents and injuries.

It’s possible to claim compensation if you have become ill or injured at the hands of medical professionals - either due to a procedure being carried out incorrectly, or a misdiagnosis leading to delayed or inappropriate healthcare. This can extend to psychological trauma caused by witnessing medical negligence - for instance, a father present at a traumatic birth. Medical negligence claims do require the expertise of a specialist lawyer, but a free consultation will give you an idea of whether you have a case.

The Government offers compensation to victims of violent crime, including those left with physical injuries, disabling mental injuries and/or a loss of earnings due to an inability to work for more than 28 weeks.

Money and Mental Health

Changes in circumstance are often triggers for mental health deterioration, especially when an ongoing sickness, injury or disability is beyond your control. Money worries will add extra stress, so working on healthy thought patterns and habits is a good idea - for example, tracking your spending and identifying the most stressful situations regarding money. The mental health charity Mind has some excellent guidance for navigating money and mental health. 

Personal Benefits - ESA, Universal Credit and PIP

If you run out of Statutory Sick Pay, or aren’t eligible, you can apply for new-style Employment and Support Allowance (ESA). ESA is intended to support you if you can’t work, or can only work a few hours a week due to a disability - however, you need to have made National Insurance contributions for the last 2-3 years.

Universal Credit is the new system to replace Income Support, Housing Benefits, tax credits and the previous Employment and Support Allowance scheme. You can claim Universal Credit in addition to SSP and/or ESA, or as an alternative if you don’t qualify.

You can claim Universal Credit in addition to SSP and/or ESA, or as an alternative if you don’t qualify.

Personal Independence Payment (PIP) is financial support for people who struggle with everyday tasks and have difficulty getting about (previously called Disability Living Allowance). If your illness, injury or disability has affected you for at least 3 months, and is expected to last for at least another 9 months, you should qualify.

PIP provides between £23.60 and £151.40 a week, depending on the severity of your condition, but it is not affected by your existing income or savings. Universal Credit is means tested, however, so will be affected by your savings, income, and spouse’s income.

It can be confusing, but the Turn2Us charity is dedicated to helping people experiencing hardship understand what financial benefits they’re entitled to. Their calculator is a good place to start.

Assistance with Housing Costs

Temporary support is available if you need help with paying your mortgage or rent. Homeowners can apply for a loan to help them make interest payments on their mortgage, called Support for Mortgage Interest (SMI). This money is paid 39 weeks after application, and must be paid back when you return to work or sell your home - so it may not be suitable in every circumstance.

Renters can make a claim for housing costs under Universal Credit.

Low-income households are eligible for a reduction of their Council Tax, although specific schemes vary across the UK.

Food Banks

If your circumstances suddenly make it difficult to put food on the table, look for local services, like food banks, that can help you with the basics. The Trussell Trust is a network of 1,200 “community organisations aimed at supporting people who cannot afford the essentials in life”, and will help you locate your nearest options or arrange a food parcel.

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Your nearest food bank may be run by a church or religious group - you can go to them even if you’re not religious, or follow a different religion.

If you’re not sure whether you’re eligible for food bank aid, your local Citizen’s Advice Bureau will be able to help (and give you a referral, if you need one). They may also be able to provide vouchers for clothing, fuel and other essentials.

Support for Carers

Remember that there is a whole other side to long-term illness, which is that your carers may also be eligible for financial support and benefits. For example, the Carer’s Allowance offers full-time carers £67.25 a week, and Carer’s Credit that covers gaps in National Insurance records so that carers can still be eligible for a State Pension.

Also, if your capacity to manage your own money is diminished, there are resources for asking others to support you in making financial decisions, or to become an appointee to make decisions on your behalf.

Ultimately, preparing for the unexpected is very difficult, and there’s no exhaustive list of resources that cover every eventuality. If you find yourself facing financial hardship due to an illness, injury or disability, know that there is always advice and financial assistance available if you ask.

Peter Ryding, founder of Vicyourcoach.com and award-winning CEO mentor, discusses the prevalence of imposter syndrome in the financial sector and how it can be tackled.

The impact of COVID-19 will be felt for a long time, materially and psychologically. COVID-19 is not a leveller. It is divisive in who and how it strikes and in its wider impacts.

July has seen a record-breaking spike in unemployment and the sharpest economic downturn in living memory with the IMF predicting global GDP will shrink by nearly 5% this year.

McKinsey foresees a dramatic impact on mental health.  As witnessed after the 2007-08 global financial crash, depression and anxiety escalated coupled with alcohol and drug use. Suicides rose by 13% with an estimated 46,000 lives lost due to unemployment and income stress.

COVID-19, however, has more in its armoury than previous financial crises. Aside from financial concerns, lockdown isolation and profound uncertainty around ‘new normal’ working environments are likely to create significant and far-reaching mental health issues.

For both humane and commercial reasons, business leaders should be alarmed and ready to act. Mental health is highly correlated with productivity. According to The Mental Health Foundation, addressing wellbeing in the workplace increases productivity by as much as 12%. And that’s during ‘normal times’. The immediate hit to productivity now and in the near future is likely to be considerably greater.

Mental health is highly correlated with productivity.

So, now is undoubtedly the time for strong, resilient and compassionate leadership. Clarity of leadership and practical support are both needed over the months and years ahead.

However, in recent discussions with CEOs and CFOs, unsurprisingly, I have seen a huge increase in stress and self-belief and confidence have taken a hit. Not only are they tackling some of the biggest challenges they have ever had to face but also facing their own job security and safety concerns. Finance in particular has been in the eye of the storm, navigating their organisations through the tumult, safeguarding and advising on financial stability and integrity.

Through my work as a coach to CEOs and boards, I know that confidence and resilience are often skin deep. Impostor syndrome is widespread.

Perhaps this should come as no surprise? The most severe cases of imposter syndrome are often observed in sectors which recruit and promote overachievers and demand the highest standards. Finance is a classic example with long hours as standard and a tough competitive culture. To be noticed, employees have to continuously outperform and work even harder than their peers so it’s unsurprising that they often suffer chronic self-doubt. Add COVID pressures into the mix and it's a recipe for a mental health tsunami.

Even the most outwardly confident and successful executives live in fear of being exposed. Which is why ‘self-confidence’, ‘overcoming self-limiting beliefs’ and ‘resilience’ are some of the most requested skills within VIC, the e-coaching and e-learning platform I founded.

What is impostor syndrome, and how does it affect the financial sector?

Imposter syndrome is a pattern of behaviour where people doubt their success and accomplishments despite strong evidence to the contrary. Impostor syndrome not only affects mental and physical wellbeing, it also negatively impacts performance, productivity and proactivity. It stymies innovation and restrains bold leadership. By sapping self-confidence and self-esteem, it can prevent you from achieving your potential and block the organisation reaching its goals.

People exhibiting traits of imposter syndrome have an internalised fear of being exposed as a fraud. Indicators include being a workaholic, being a perfectionist, never asking for help and needing to know everything yet never knowing enough. These traits are often encouraged and rewarded in the finance.

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According to recent research nearly 60% of workers in accountancy, banking and finance have experienced imposter syndrome and whilst both men and women experience it, women seem to suffer more than men. A 2019 report by Access Commercial Finance found two-thirds of women had experienced feeling like a fraud in the previous 12 months and only half of men. Disparities still exist in female representation at senior levels in the financial services sector. Whilst 44% of the workforce are women, they make up only a third of senior management. External validation alleviates imposter feelings and a lack of inclusion, role models and positive support reinforces self-doubt.

So, what can you do to overcome impostor syndrome?

For some, impostor feelings are fleeting, and for others they are persistent. There are practical measures you can take against them. For example:

• Know it’s common. Studies suggest that simply knowing you are not alone helps.
• Separate feelings from fact. Just because you feel something doesn't mean you are. We all feel ‘not quite up to the task’ at times.
• Accept you will never be perfect and forgive mistakes.
• Give yourself credit. Recognise your worth and value, internalise positive feedback and don’t fixate on the negative.
• Attribute success truthfully. Everyone has good and bad luck. Attributing success to luck undermines your abilities and confidence.
• Identify your ‘rules’, challenge them and rewrite. “I don’t have to be right”, “I don’t always have to know the answer”, “I can ask for help”, “I don’t have to be strong”.
• Keep a list of your accomplishments and strengths. It’s less easy to discount your success when seen against a backdrop of past successes.

Actions to address impostor syndrome in your organisation

Impostor syndrome negatively impacts the success of your whole organisation. So, take positive action to address it.

• Develop clear policies to address and support mental health. This is no longer a nice-to-have but an essential. Train managers to spot mental health red flags within their teams.
• Spot drop offs in performance or signs of regular overwork - emails sent way before or after normal working hours, unusual delays in responding, holidays not being taken or procrastination over decisions.
• Watch out for team members who are feeling out of their depth. Look for signs of loss of self-confidence and anxiety, for example expressing greater uncertainty, becoming self-deprecating, deflecting praise, attributing success to luck or to the skills of others in the team.
• Attribute success fairly and rebalance; reward teamwork and as well as hard work. The current and post-Covid environment will require a new approach to incentives and performance management.
• Discuss imposter syndrome. Studies suggest education helps.
• Have a strong inclusion agenda. Women and minorities suffer more from impostor syndrome and strong role models and positive support help.

We want to reach out and help businesses, teams and employees during these extraordinary times by offering VIC for free. VIC gives an interactive ‘coach in your pocket’ for all employees with self-coaching tools and thousands of hours of multi-media content to help with self-confidence, stress, resilience and a host of other personal and business skills.

In its latest report Late Payments: The Cost to Business and Our Health, Hitachi Capital UK has investigated the mental health impact of late payments on the UK’s SMEs and freelancers. The research finds that there is an urgent need for action to alleviate the emotional and financial burden of the issue, acknowledged by Government as an inhibitor to the growth of the UK economy.

From a sample of 1,000 SMEs and freelancers based in the UK, a sizeable 11% of surveyed freelancers have been diagnosed with a clinical condition due to clients failing to pay invoices on time. This figure equates to over 200,000 freelance employees in the UK^₂, with the most common conditions anxiety (61%), stress (45%) insomnia (41%) and depression (27%).

In addition to highlighting the harmful effects of late payments, Hitachi Capital UK’s research outlines the prevalence of late-paying clients for freelance businesses. Two-thirds (65%) of respondents have experienced at least one instance where a client has failed to pay within an agreed payment period.

The research has exposed the drain of late payments on productivity and resource among freelancers, who are now spending an average of 77 minutes each day chasing clients. Almost half (49%) of freelancers are spending 1-4 hours each day chasing late payments, losing valuable time to grow their business and service existing customers.

The majority of freelancers surveyed were unfamiliar with the preventative measures available to them, with over a third (35%) unaware that interest can be claimed on late payments from clients. Similarly, only 15% of freelancers are aware that late paying clients can be taken to the Small Claims Court.

Robert Gordon, CEO of Hitachi Capital UK, said: “The current focus on Brexit has detracted from some of the most pressing issues affecting SMEs. It is high time that we hold poor payers to account for failing to pay on time and in full, acknowledging the effect that cash flow shortages can have on the wider health of the economy.”

Hitachi Capital UK’s extensive research has already found that that late payments are costing almost a third of SMEs at least £10,000 a year; with 40% of SMEs having used their own money to close cash flow gaps within their business. An overwhelming majority of these respondents (80%) invested their own savings to cover operational costs and keep their businesses afloat.

Commenting on the findings, Simon Blake, Chief Executive, Mental Health First Aid England, added: “Being self-employed or working in an SME can present a number of challenges to our health and wellbeing - including the pressure of managing a consistent cash flow. The link between late payments and mental health issues is a worrying trend and requires quick action to ensure that people are not left to suffer in silence.

“This is one of the many reasons why we are working towards a future where people in every type of community have the training and resources to support their own and others’ mental health. People from all walks of life - whether working as freelancers, in SMEs or in larger businesses – should be empowered to seek and offer support if they are struggling with their mental health.”

With a lack of time putting pressure on workforce health and productivity, maintaining a healthy work/life balance can be tough. 

Jasper Martens, CMO of PensionBee shares with Finance Monthly three top tips on how SMB owners in the financial sector can support their workforce to ease time restraints and overcome a hustle and grind mentality.

1. Quit working the weekends

UK-wide, people are working longer hours and longer weeks, and while three out of five financial sector leaders started their small business for a better work life balance, little over half actually feel like they get it. Almost half of small business owners in the sector say that they work through holidays and their annual leave, more than any other sector.

Finding ways to free up weekends and holidays for the sake of health alone is an admirable goal, but it inevitably conflicts with other business goals that had put pressure on time and deliverables in the first place. Some of our fintech peers hold the belief that people should work seven days a week and increasingly long hours. We’re the opposite – when it comes to hustle and grind, our focus is on looking at the most time effective way to get the job done.

As a small customer-centric business, we do what is necessary to keep our customers happy and find that automating work flow saves a lot of time. By automating parts of the everyday, we’re able to spend on growing the business and improving our service. There’s something to be said about the industry on a whole that the financial sector on average feels more strongly than any other sector that digital transformation has a positive effect on their business.

2. Ditch the time-sinks

Admin is necessary, but often a huge time-sink. How can this be cut down? It’s a question you’ve most probably asked yourself to no avail - but there is a way.

Two thirds of financial sector leaders feel that Cloud based technologies are a necessity when it comes to time management. For us, it’s about automating reoccurring paths and connecting customer touch points. Putting time into understanding, tailoring and using a good CRM to get all the relevant information in the right place, in the right order and accessible to use, will ultimately return more time in the future

As companies grow, processes need to evolve and be flexible to meet new demands. Out-of-date processes only hinder growth and ultimately eat away at time that could be better spent elsewhere.

3. Listen to your team

As an SMB you’re in a great position to address issues of burnout or stress amongst your workforce, it’s a force for good that we can communicate with each employee on their individual needs.

We're tripling our size every year, faster than we anticipated, and with that success comes a need for a lot more thinking about the way we work as a company and especially on how we support our employees. As a small business it is tough because you just need to get the job done, but that mentality can also lead to higher stress levels and presenteeism. We have to pay attention to people, and talk openly about personal and mental health.

Time will always be a limited resource, and the pace of modern business is only likely to increase in the future. Yet, mental health now accounts for over half of all working days lost due to ill health in and is the most prevalent reason for sick days in the UK. Now, more than ever, we need to address the time pressures impacting on employees to provide support and mitigate more damage to employees and small businesses in the financial industry.

When combined with the news from the ‘Time to Change’  campaign that people would rather talk to colleagues about relationship issues, money problems and even sex, than discuss mental health, it seems that there still could be a stigma attached to talking about mental health at work.

In this article, Pam Loch and Bruce Jenner look at why employers need to be more proactive in addressing mental health issues in the workplace and discuss some simple steps that financial institutions and financial services firms can take to show their commitment to employee wellbeing.

Why should employers care?

The UK Government’s ‘Thriving at Work’ review showed that currently, 300,000 individuals leave employment each year as a result of mental health issues. This, in turn, is costing employers between £33bn to £42bn a year – a figure which equates to between £1,205 - £1,560 per employee. These costs are made up of the cost of covering absenteeism, the impact on productivity from presenteeism and from staff turnover. These are costs which are avoidable if mental health is managed more effectively before it becomes an issue.

The employer’s obligations

Under the Equality Act 2010, a mental health condition is considered to be a disability if it has a long term and adverse effect on an individual’s normal day-to-day activity. The Act places certain obligations on an employer to consider and make reasonable adjustments to ensure the individual is not discriminated against in the workplace.

Not explicitly knowing about a disability is not a defence against Employment Tribunal (ET) claims. In Baldeh V Churches Housing Associate of Dudley and District Ltd 2019, the Employment Appeal Tribunal (EAT) found that even though the employer did not know about Baldeh’s disability (depression) at the time of dismissal, they found out about it during her internal appeal. This did not impact the appeal outcome but rather resulted in the appeal being regarded as part of the unfavourable treatment she based her discrimination claim on. The EAT subsequently referred the case back to a fresh ET hearing to consider whether the rejection of the appeal was an act of discrimination.

There is also a risk that the ‘always-on’ culture in some organisations contributes to the stress and anxiety felt by individuals.

Even though an employer may not have an explicit notification of a disability, there may be other clues or evidence which gives them ‘constructive knowledge’ of a disability. If on the basis of these clues the employer could be reasonably expected to know about a disability, this will trigger their obligation to consider and make reasonable adjustments under the Equality Act 2010.

This demonstrates the importance of embedding a culture in the workplace where mental health conditions can be talked about in the same way as physical illnesses. Remember, employers are liable for the acts of discrimination of their staff, so the language or ‘banter’ within a workplace around someone’s mental health also puts employers at risk of successful claims of bullying or harassment.

There is also a risk that the ‘always-on’ culture in some organisations contributes to the stress and anxiety felt by individuals. Emails sent after hours or work-related WhatsApp messages sent over the weekend or on holidays not only have the potential to impact an individual’s mental health, but they could also put employers at risk of disputes around breaches of the Working Time Regulations 1998.

The benefits of looking after mental health in the workplace

 The ‘Thriving at Work’ review cites research conducted by Deloitte which demonstrates the returns to employers who invest in mental health in the workplace. The average return for every pound spent was £4.20, with figures between 40p to £9. This demonstrates an overwhelmingly positive outcome for employers who invest in supporting the mental health of their workforce.

This return can be seen in the costs associated with absenteeism, presenteeism, and staff turnover. Supporting mental health in the workplace means fewer employees end up taking days off work, and a reduced absenteeism rate. The flip side is presenteeism – where employees turn up to work despite being unwell for fear of being labelled or judged by colleagues. These employees are not functioning at full capacity and the lost productivity costs businesses £4,048 annually.

There is also a well-documented connection between physical and mental health, so looking after the mental health of your staff will make them less likely to suffer physical ill health.

Supporting mental health in the workplace means fewer employees end up taking days off work, and a reduced absenteeism rate.

What options do employers have to support mental health

The first step employers need to take is to ensure there is a culture which enables staff to talk about and report mental health issues. Mental Health First Aid training is an accredited training course which gives employees the skills to identify the signs of mental health issues and help colleagues find the right support. This training has been shown to increase the overall understanding of mental health in workplaces that have had the training.

The training can be backed up with a review of policies and procedures aimed at reducing the risk of discrimination occurring in the first place. An Equality and Diversity policy is key to setting out how disability is managed in the workplace, and the steps the organisation will take to help protect employees with a disability. This can be combined with an anti-bullying and harassment policy, and a specific wellbeing policy.

Employers’ policies may also include examples of the types of reasonable adjustments that could be made, and the process for employees to request these. This can include flexible working or working from home, providing quiet spaces away from noise and activity, or altered start/finish times. Employers also need to ensure social media policies cover the use of informal messaging apps, and the language and behaviour expected when communicating via these channels.

Organisations that embed a culture of openness towards mental health will benefit from fewer disputes and claims against them as well as reduced instances of absence and ill-health.

Given the close connection between physical and mental health, employers should also consider a programme that promotes overall wellbeing. This can include benefits like Wellness Checks to allow individuals a check of their health across multiple risk factors, Employee Assistance Programmes (EAP) which offer 24hr phone line support, providing healthy food options in staff canteens, and offering access to sports clubs after work at discounted rates.

This can be combined with an internal communications programme which signposts employees to support services such as an EAP or external organisations such as the Samaritans, encouraging employees to take adequate breaks and to talk about mental health openly with their managers.

Employers can also use staff surveys to engage with their staff around wellbeing, gaining useful insight into the attitudes and levels of engagement from staff. These surveys can allow employers to spot trends which may be affecting the mental health of the workforce and take action before it leads to increased absences from work.

These simple and relatively inexpensive steps will not only prove to the staff that the organisation takes mental health seriously, but will also provide a financial benefit for those businesses that invest in.

Organisations that embed a culture of openness towards mental health will benefit from fewer disputes and claims against them as well as reduced instances of absence and ill-health. They will also see a more engaged workforce, and ultimately improved productivity from their staff. It will also make such companies more attractive to potential new recruits.

It is no longer a question of whether a business can afford to support mental health at work, they can’t afford not to.

Data shows that almost half of those working in Britain have financial worries (40%) and this is linked closely with stress and depression.

The research by Salary Finance, a financial wellbeing solutions provider, surveyed over 10,000 British workers. Of the group with financial worries, a huge 73% reported to suffer with stress, and 46% with depression. Overall the data showed stress levels were 380% higher and depression levels 490% higher than those who did not have financial worries.

And of those that earned more than £100,000 per annum, over half (55%) stated they suffered from anxiety and panic attacks, and 53% stated they suffered from depression.

Anxiety and panic attacks have a fourfold higher occurrence among working people with money troubles. Sleepless nights were also reported nine times more frequently, while 41% of those surveyed admitted that their quality of work was affected by unease about the state of their finances.

The data also revealed that the nation’s financial situation is a concern - with 18.6 million working people in the UK (53%) lacking financial resilience and 11 million regularly running out of money between paydays.

Asesh Sarkar, CEO at Salary Finance, said: “As April is National Stress Awareness Month, we wanted to further highlight the issue of financial stress and the impact this can have on people – particularly in the workplace. This added level of stress is something that employers need to address by removing the taboo of talking about money worries in the workplace.

“It is not a matter to be taken lightly, but interestingly is something that people are happy to share with their employers. In our research 77% of respondents said they trust their employer to treat their financial situation as confidential. This puts employers in a great position to really help their staff become more financially stable and therefore happier in their everyday lives.”

The findings also reflected on how this impacts people during the working day. The group with financial worries were shown as eight times less likely to finish their daily tasks, and almost six times more likely to report troubled relationships with co-workers.

They also take 1.5 days a year off work due to their financial stress and are more likely to be looking for a new job. This can have a great impact on employers in turn. A recent Harvard Kennedy School study reported that the cost of losing an employee is between 16-20% of annual salary.

The overall impact on British business is estimated at £39-51 billion annually, equating to almost 2.4% of UK GDP. This is greater than the budget for defence and more than half the education budget.

Asesh added: “We are passionate about the role that employers can play in helping staff get their finances in shape. 

“Employers are in a unique position to provide support, through financial education, salary-deducted savings, advances and loans, to help employees increase their financial fitness and ultimately improve their financial wellbeing. The added dividend for businesses comes in the form of a happier, healthier and more productive workforce.”

(Source: Salary Finance)

In light of Mental Health Awareness Week, Heather Magee, HR Director at EValue, discusses tackling financial anxieties in the workplace.

According to mental health charity Mind, approximately 1 in 4 people in the UK will experience a mental health problem each year. What’s more, 89% of individuals said that these issues affect their daily working life. And while it seems that more and more people are being affected, there are ongoing concerns that employers are not doing enough to support members of staff who are suffering from mental health issues, and help make work more manageable for them.

According to the Mental Health Foundation, 13% of all sick days in the UK are down to mental ill health. These issues also often manifest in staff turnover and poor productivity – which costed UK employers a combined £42bn in 2017. It is therefore essential that businesses do all they can to minimise workplace mental health issues – both for the wellbeing of their employees, and their bottom lines. This is where investments and pensions advice and guidance can play a crucial role.

Feeling the financial strain

It’s not just the day-to-day stresses of work that cause employee anxiety. One of the greatest causes of stress in the workplace seems to be worries about personal finance. Money worries are known to have an enormous effect on mental wellbeing, and can be both the cause and effect of mental health problems. It is vital that employers understand the impact that personal financial worries have on workplace mental health, to ensure staff have a better ‘financial wellbeing’ at work. Financial wellbeing is defined by a combination of key factors: being in control of finances; having the capacity to withstand financial shocks; having confidence in the future; and having choices on how to spend and save. Without this, staff may naturally feel more insecure about their finances.

According to CIPD’s latest Health and Wellbeing at Work report, financial wellbeing is still a relatively neglected area of organisational policy. The report found more than a third (36%) of managers did not believe their workers demonstrated the knowledge or skills to make the right rewards and benefits choices for their financial needs – something that urgently needs to change.

One key way to help businesses keep their employees happy and informed about their financial and pensions security is using external support, such as employee benefits consultants. In today’s competitive market, this additional support can not only provide financial guidance to keep workers assured, but also help attract and retain staff.

The benefits of benefits consultants

Employee benefits strategies should encompass everything from healthcare to flexible working, to improve the mental and physical wellbeing of employees. In turn, this can help drive employee engagement and happiness.

Pensions should be a key focus area for benefits consultants. In previous years, plans were seen as a bonus and a job attraction–, but today the implementation of auto-enrolment has standardised the pensions landscape. Here, employee benefits consultants can play a vital role, helping companies better understand their workforce’s needs, and develop options that ultimately offer workers more job satisfaction by catering to them and their lives. Companies can also use new technologies to create in-house platforms that make it even easier for employees to access their benefits and stay informed. This technology also enables smaller businesses, or employee benefits consultants without formal financial training, to provide financial advice.

Providing peace of mind

When it comes to other steps that companies can and should take to address mental health issues in the workplace, businesses should train staff to spot signs that someone could be struggling, and for them to be able to direct employees towards appropriate support. This can be done by training people to be qualified mental health first aiders that can provide in-house support. Once trained, these first aiders can identify, understand and help anyone that may be experiencing a mental health issue.

Mental health first aid could become mandatory in workplaces, so any businesses that adopts it now will be ahead of the game, as well as helping to create a supportive, open culture around mental health.

Companies can also help alleviate unnecessary anxieties by ensuring that workers know all the facts about their pensions, giving them the freedom and knowledge to make informed financial decisions.

When it comes to personal finances, businesses should also do everything possible to educate employees, be it through training programmes, workshops or printed materials. Money worries can have an enormous effect on mental wellbeing and can be both the cause and effect of mental health problems. By eliminating this problem, mental health in the workplace can hopefully be significantly reduced – and ensure that people keep enjoying coming to work.

Business telecommunications provider, 4Com has looked into Britons’ attitudes towards their co-workers to reveal just how willing the nation is to create meaningful relationships with those they spend so much time with day-to-day.

According to the research, our willingness to be social in the workplace differs from industry to industry. Finance comes in as the friendliest occupation with a huge four in five (81%) of workers saying they have made lifelong friendships with colleagues, refuting the idea that work is merely a place to get a job done, then go home.

Based on the percentage of people (per industry) who said they have made meaningful friendships at work, 4Com can reveal that the top five friendliest industries in the UK, are:

1. Financial services (81.1%)
2. Business to business (80.8%)
3. Health/healthcare (79.5%)
4. Education (77.9%)
5. Retail (77.9%)

But is having close friendships at work a help or a hindrance?

According to Consultant Psychologist and Clinic Director Dr. Elena Touroni from The Chelsea Psychology Clinic, close relationships at work can actually be good for productivity. She says: “When people get on well and develop friendships, there is a greater supportive and positive energy, which ultimately makes the experience of going to work more pleasant. Although it can be more complex in some instances, being in an environment that you enjoy generally has a positive effect on your overall productivity. Long story short: happier people work harder.”

This tallies with the experiences of financial services workers as the majority of those with close friendships agree that the relationship makes them more productive. Their top reasons for this are:

1. Because they make me enjoy my job more (72%)
2. Because I know I can ask them questions about things I’m not certain on (51%)
3. Because I can turn to them for advice  (40%)

Speaking about her best friend, Rachel from Leeds says: “I met my best friend two years ago at work. A few weeks after starting at the company, I went to the Christmas party where I met the other newbie, Charly. We clicked straight away, couldn’t stop talking and literally cried with laughter. We quickly became inseparable in and outside of the office.

“As we were both new to working in the industry, we helped each other tremendously. We had talents in different areas of the job and felt comfortable asking each other for help without the fear of judgment on things we weren’t yet confident in. This helped to ease any anxieties or worries about our own abilities and learn new skills. We stood side by side throughout the (many) ups and downs, in and outside of work, and although she’s moved to a different country, I know we’ll be friends for life.”

On the other hand, almost one in five (19%) of finance workers say they have never established a relationship with colleagues that go beyond the normal small talk. For them, the most common reason is simply that they are at work to do a job, not for friendship (40%), while a further two in five (40%) admitted having nothing in common with their workmates. This is most true however, for those in the public sector, of which one in four (25%) have never made meaningful relationships at work.

Consultant psychologist Dr. Touroni provides some insight: “Some people can find vulnerability in a work environment threatening, so preserving a boundary between personal and professional life helps them feel more secure. This self-protective mechanism is especially relevant when one is in a position of authority. Close friendships become a lot more complicated when a power dynamic is introduced, so it is often easier to maintain a level of distance with lower-level colleagues if you are in a position of seniority over them.”

Commenting on the research, Mark Pearcy, Head of Marketing at 4Com, said: “We spend a lot of time with our colleagues, more so than with our other friends and family, so it’s nice to see we’re building strong and meaningful relationships with these people. To help you make the most of your work relationships, we have put together a blog post with more findings from the study and some helpful tips.”

(Source: 4Com)