How to manage your money in uncertain times

Financial wellbeing is the sense of security and ease that comes with knowing you can pay your bills today, deal with the unexpected and that you’re on track for a healthy financial future. Sounds dreamy, no?

Financial wellbeing matters because it’s hard to think clearly and make decisions that serve you when you’re living under a cloud of money worries.

I don’t need to tell you that these are uncertain times – globally, politically, economically. If you’re overwhelmed and living with money worries, it’s understandable.

Money is emotional

Money is emotional. Our emotions, such as fear, despair, guilt, shame, sadness and anger, influence how we behave with money.

Managing your money in uncertain times is about understanding your relationship with money and managing your behaviour accordingly.

While it’s not helpful to act out of fear and panic, it’s also not helpful to procrastinate and not make a decision at all.

Start by checking in with yourself. How are you feeling about your financial situation? What does financial security look like for you now, in the next six months, in a year?

Financial review

Then, review where you are now. Your income, your outgoings, your savings, your investments.

Once you know where you are, you can make an informed decision about what, if anything, needs to change to increase your financial security and give you peace of mind.

Set financial goals. Get clear on what you want to achieve, and why, and take action.

Focus on what’s within your control. Shopping around for the best interest rates on savings and mortgages? Within your control. Setting interest rates? Not so much.

Managing behaviour

How is this playing out in real life? For one of my money coaching clients, it’s speaking with her husband about life insurance and income protection as they’re soon to become parents.

For another, it’s reviewing her income and outgoings and looking for a new, higher-paid role after being informed that her current job is at risk of redundancy.

Another client is reviewing the balance of savings versus investments.

Jon Nicholson Ashcroft, an independent financial adviser at Ashcroft Wealth in Cardiff, told me how he helps clients manage their behaviour with investments, particularly following the announcement of US tariffs on global markets.

Talk through fears

Ashcroft says: “I emailed clients after the tariffs were announced to explain what we were doing, what the fund managers will be doing, and that we would be in touch if anything changed.

“I had one client call me, who’s a particularly nervous client. And that’s absolutely fine, that’s what I'm here for – managing expectations, helping clients talk through their fears, coaching them, really, and helping them make sure that they’re still investing for the right reasons.

“If people want to cash in their investments motivated by fear or panic, if they think that the market is going to keep going down and they’re going to end up with nothing, it’s my job to try and reassure them, reminding them why they’re invested.”

Investing shouldn't keep you up at night

“I have said to clients in the past who are overly worried that perhaps this isn't right for you,” says Ashcroft.

“Investing shouldn’t keep you awake at night. You need to be happy with what you’re doing and, if you’re not, then maybe it’s not for you. I give people that option because there should be no pressure.

“People shouldn’t think they need to be invested. It has to be something that works for them and delivers an end goal rather than something that causes them to worry about their money disappearing.”

Personal finance is personal

“Personal finance is personal,” says Funmi Olufunwa, mortgage adviser and finance expert.

“One thing that frustrates me is that we have all of these headlines that talk about mortgage interest rates. Yes, those rates are available in the market, but they’re not necessarily rates available for you.

“I see it a lot on Facebook groups I’m in. People will ask others: ‘How much did you borrow? Where did you borrow? What rate did you get?’”

This doesn’t mean that particular lender is going to lend you that amount of money at that particular rate.

“The most important thing you can do is work out your financial goals, then speak to somebody who can then say: ‘Based on your situation, this is what’s available to you.’ Which may not be, for example, the 4 per cent mortgage rate you’re hearing about in the news, because that’s likely to be for people who have a big deposit of at least 40 per cent.

“There was a period of time when everyone was saying ‘just go for a tracker mortgage’.” This is a variable-rate mortgage that tracks a base rate, typically the Bank of England base rate.

Know yourself

But, says Olufunwa, “if you’re the sort of person feeling sick in the week leading up to the base rate announcement because you’re worried the rate’s going to go up and you know you dont have a lot of leeway in your budget, that would suggest a tracker mortgage isn’t the type of product for you.”

If certainty over your monthly mortgage repayments will help you sleep at night, a fixed-rate mortgage may be the better product for you, she says.

“So, ignore what Bob next door’s doing because you don’t know Bob’s circumstances, how much flex he's got in his budget or what his risk tolerance is.

“Bob might love the anticipation of the base rate announcement, whereas you’re freaking out. Personal finance is personal.”

Talia Loderick is a money coach. She helps people understand and take control of their behaviour with money, so they can stop stressing about it and have enough to live well, now and in the future. Visit: talialoderick.co.uk