What has money got to do with Wellness? Well messy finances have a way of wreaking havoc on other areas of your life – they’re another source of stress and if you’re stressed chances are you’re not feeling as healthy or happy as you’d like. How do we eradicate our financial demons?
Picture the scene. You’ve been flexing that new credit card far too much. So perhaps you fall behind on your payments. Perhaps you get into a bad habit of spending more than you earned – for the fifth month running. You feel yourself sliding into debt. Your overdraft limit is looming, and you’re only halfway through the month. You would try to pay the phone bill but you can’t remember where you left it – probably in the same pile as all those receipts/papers for your tax bill form. U-ho.
Your partner gets wind of the credit card gymnastics and isn’t happy. The stress starts to take its toll on your health. You borrow more to get back on track, but end up further in debt on credit cards with crippling interest rates. Bailiffs come a-knocking. Partner leaves you for younger, more solvent model. House repossessed. Life in tatters. Die alone surrounded by cats.~
See what happens when you don’t take your finances by the proverbials? Start by assessing just how organised you are when it comes to income, outgoings – and striking that fine balance. Are you sensibly thinking of the future? Is your pension plan a winner? Do you actually have a pension? Do you invest wisely? Do you actually have a savings plan?
Health experts are bemoaning the fact that we’re fast becoming a nation of fatties. The thing about the population carrying a few extra kilos is that it’s pretty obvious to the most untrained of eyes. Take a walk down your local high street and watch people waddle. Our readiness to take on previously unheard of levels of debt is a different story. Barring a spectacular fall from monetary grace, our financial health is our secret. How could the couple two doors along afford to have that conservatory built? Who knows? How can the neighbours manage to put all three of their children through private education? How can the office administrator go on quite so many expensive holidays?
What we do know is that collectively we are carrying more on our credit cards and mortgages than any previous generation. The average household has debts of around £53,785 (including what we owe on our mortgages), with many of us owing between six and twelve times our household’s annual income. Credit Action reports that 8,465 new debt problems were dealt with by the Citizens’ Advice Bureau each working day in the first half of 2012.
Debt’s the way to do it
We’re debt junkies. Go to college and come out with a qualification and a pile of bills. You’ve chanced on a bargain in the sales but you’re a bit short this month? No problem – stick it on the credit card. Whether it’s buying a house or a car or just paying for Christmas, resistance to debt has never been lower.
Somewhere along the line, we’ve succumbed to the delusion that owing money is sophisticated. We look on that elderly uncle who’ll only buy something when there’s cash in the bank to pay for it as some kind of financial ingénue rather than as a model of financial prudence.
And, of course, it’s getting ever easier to pile up the debt. Credit card companies seem to fall over themselves in their haste to bump up our credit limits, and then send us a letter telling us the ‘good news’ that our capacity for debt is now that much greater. Damn their eyes.
Used sensibly, credit cards can be a neat budgeting tool, which can provide a bit of financial flexibility. And borrowing money via your credit card can be extremely positive if you use it to buy smartly. Part of the trouble is that most of our credit card spend tends to go on buying liabilities rather than assets. Borrowing money to buy things that go down in value is a very bad habit to develop.
An average of 314 purchases are made in the UK every second using debit and credit cards, and at the last count the UK’s total credit card debt was £55.4 bn. In November 2012 the average interest rate payable on credit card transactions was 18.35% – 17.85% above the Bank of England base rate. Do you know what your total credit card debt is? Do you know what rates of interest you’re paying on the cards you use? Chances are they vary quite widely.
So when it comes to getting your finances in check, you need to clarify your objectives. Tick any of the following that apply to you. It may also be worth cutting the list out, or copying it on to a big piece of paper and sticking it on the wall to remind you why you’ve finally resolved to get more money-organised.
1. I want to be out of debt.
2. I’d like to be able to lay my hands on important bills/receipts/statements without having to turn the house or office upside down.
3. I’d like to start saving.
4. I’d like to be able to live mortgage-free within the next ten years.
5. I’d like to be more punctual and organised when it comes to paying bills – no more red ones!
6. I need to feel calmer and less flustered when it comes to my finances.
7. I need to start planning for my children’s future – university fees, etc.
8. I’d like to overhaul the way I spend my money.
9. I’d like to be able to make more money without doing more work!
10. I’d like to get savvy about the stock market.
11. I’d like to know how to get everything cheaper – give me some bargain-hunter basics.
12. I’d just like to start afresh….
If you ticked four or more, you need a finance-makeover – pronto.
Extracted from The Corporate Wellness Bible by Kate Cook (www.infideas.com). To discuss how your business can benefit from The Corporate Wellness Bible, including how you can order bespoke versions for your company, please email firstname.lastname@example.org or call David Grant on 01865 514 888.