5 practical ways to cure financial insomnia

Senior man sleeping happily

World Sleep Day, which fell on 15 March, is an annual opportunity to celebrate the benefits of good sleep and raise awareness of sleep problems.

You’ve probably noticed how a good night’s sleep can give you the energy to face the day with confidence, whereas poor sleep might leave you feeling fatigued and grumpy.

If you’re battling insomnia, identifying and addressing the cause could help you get more sleep.

Stress often underlies sleep problems, and financial concerns are a common trigger. Recent research from Standard Life found that 1 in 5 people have lost sleep worrying about their retirement preparations, for example.

So, getting on top of your finances might help you reduce stress and sleep better. Read on to discover five practical ways to cure financial insomnia by getting your finances in order.

1. Identify your financial concerns

Identifying your primary financial concerns may be the first step to overcoming them. Perhaps you’re worried about spiralling debt, or a downturn in the performance of your investments?

Often stress comes from denying or avoiding a problem and, unfortunately, thoughts quashed during the day may rise to the surface at nighttime leading to disrupted sleep.

So, tackling your money problems head on could be the first step towards regaining control of your finances and easing stress.

One practical way to do this is to talk to a trusted friend, family member or financial professional.

Although you might feel awkward discussing your finances at first, talking openly and honestly could help you identify your financial concerns and tease out the triggers of your stress.

Furthermore, talking to others could ease the burden you’ve been carrying, and it may give you an alternative perspective on your situation.

Financial problems often affect the whole family, so involving your loved ones in discussions can be an important step in turning things around.

2. Assess your financial position

Once you have identified your primary concerns, it’s time to assess your financial situation.

If you’ve been ruminating over an issue for a while, your emotions may have taken over and you might have exaggerated the problem in your mind. By reviewing the facts and figures objectively you could gain a clearer understanding of your financial position.

Whether you discover that you’ve been unduly worrying, or you identify an issue that needs tackling, having an accurate overview of your finances could help you create a plan for moving forward.

You might review your financial position by detailing your income, debt, and spending over at least one month. Identify where you spend money, and where you overspend or miss opportunities for saving and investing.

A financial planner can use cashflow modelling to help you understand if you’re on track to achieve your financial goals.

For example, if your concerns about whether you’ve saved enough for your retirement are keeping you up at night, a financial professional can help you understand what your retirement income is likely to be based on your current savings strategy.

Getting a clear picture of your financial situation could give you a sense of control and it may be an important step towards tackling the causes of your financial insomnia.

3. Make a financial plan and stick to it

You might now be in a position to set clear goals and create a plan for achieving them. Considering your broader life goals could help you create a financial plan that you’re motivated to stick to.

For example, if you’ve assessed your financial position and discovered that you’re not on track to afford the retirement lifestyle you want, you might decide to increase your pension contributions or start investing to boost your savings pot.

Having a meaningful financial plan with clear milestones often provides valuable peace of mind and it may reduce stress. It may also allow you to monitor your progress towards goals, so you can quickly take action if you veer off course.

Additionally, taking a long-term perspective on your financial goals could reduce the risk of making emotional decisions based on short-term fluctuations in the value of your portfolio.

4. Build an emergency fund

While financial planning can help you overcome money problems and achieve your goals, remember to plan for the unexpected too.

Having to find money if an emergency arises can be stressful. Expensive car repairs, a broken boiler, a leaky roof, or a short period out of work can all require you to get your hands on much-needed money quickly – and this can cause sleepless nights. Conversely, having a contingency fund to draw upon when you need it could help you rest easily.

Most experts suggest accumulating somewhere between three- and six-months’ expenses in an emergency fund. You can tailor this to meet your circumstances and needs.

Building an emergency fund also reduces the chances that you’ll need to rely on expensive borrowing, such as credit cards, to meet your outgoings.

5. Speak to a financial planner

Seeking advice and support from a financial planner can offer both practical and emotional benefits.

According to research by Royal London, regular financial advice improves emotional wellbeing by helping customers feel more financially secure – 63% of advised individuals said they feel financially secure and stable compared to just 48% of non-advised individuals.

By working with a financial professional you could benefit from their experience and knowledge. A financial planner can also use tools such as cashflow modelling to help you understand what your future income needs might be and assess whether you’re on track to achieve this.

This support could provide a welcome confidence boost and alleviate any stress you’re feeling about financial matters.

If you’d like to learn more about how to reduce stress by getting on top of your finances, we can help.

To find out more, please get in touch. Email or call us on 01454 416653.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

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