Nearly half of adults feel stressed because they put off important financial decisions – due to being overloaded with “life admin”.
A study of 2,000 adults found 43 percent feel swamped by the choices they have to make about money.
As a result, 53 percent have avoided making certain decisions altogether as they simply couldn’t face it.
But this “head-in-the-sand” approach left them feeling stressed (54 percent), nervous (40 percent), and upset (32 percent).
The research was commissioned by comparethemarket.com to launch its new money management tool – the Good Things Hub.
Financial guru Emmanuel Asuquo said: “It can be easy to find yourself burying your head in the sand when it comes to money, particularly if you’re feeling worried about it.
“But hiding from problems doesn’t make them go away and, in most cases, it can make them much worse.
“Although it’s easy to feel anxious about your finances, it’s important to try and stay on top of money management and find some support.
“Helpful tools such as the Good Things Hub on comparethemarket.com are a great place to start.”
The study also revealed differences in demographics, with 85 percent of 18-year-olds feeling overwhelmed by financial decisions.
But this drops over the decades, with 72 percent of those in their 20s feeling the same, compared to 59 percent of those in their 30s, and 42 percent in their forties.
Only 31 percent of 50–59-year-olds feel overwhelmed by their finances, along with just one in four over 60s.
The study found monthly outgoings peak in your 30s at an average of £1,173, with cash going on eating out (46 percent), putting money aside for their children’s future (33 percent) and investing money (30 percent).
When adults get to their sixties the average outgoings are almost half at £685, with 54 percent admitting they don’t feel very stressed by the financial decisions on their plate.
For the over fifties, 18 percent admitted managing their finances is less time consuming than it was in the past, and their outgoings relate more to leisure and the future, including putting savings aside (67 percent), deciding how much to keep as disposable income (55 percent) and saving for a holiday (52 percent).
However, it’s in their forties when adults have the most outgoings – an average of ten a month, according to the study by OnePoll.
Ursula Gibbs, at comparethemarket.com, said: “As we get older, there are more decisions to make about managing money and this tends to peak in our 40s.
“Therefore, as our lives get more complicated, typically with the introduction of children and mortgages, so can our finances, which many admit to finding overwhelming.
“For today’s young adults, entering the world of money management could feel overwhelming.
“Comparethemarket.com is now offering the nation more ways to manage their money than ever before helping to support everyone with their financial decision making.”
To find out more ways to manage your money visit www.comparethemarket.com.
EMMANUEL ASUQUO’S TOP TIPS FOR GOOD MONEY MANAGEMENT:
DON’T PUT YOUR HEAD IN THE SAND. Money management can be overwhelming and stressful, especially if you’re new to it or are facing a change in circumstance. However, the worst thing you can do is put your head in the sand if you’re feeling stressed. Instead speak to someone, or better yet, seek information from a trusted source such as comparethemarket, where you’ll find many resources and tools on its Good Things Hub which will help you to manage your money, without the headache.
MINDSET. Before you start your money management journey, you have to work your money mindset. The first step is identifying your “why”. Your why is something so crucial that you will not give up, even when things get hard. For example, to support my family or retire at age 50.
NEEDS vs WANTS. The next step is to look at your outgoings and identify the things you are spending money on and if they are needs (life essentials such as groceries, rent/mortgage, water, utilities etc) or wants (life’s luxuries such as eating out, holidays, TV subscriptions). The best way to do this is to list all your outgoings and then put them either in the need column or the want column. When you total the need column, you will know “how much it costs to be you”. Then you decide what outgoings from the want column you’re going to keep.
ACCOUNTS METHOD. People make a big mistake in having all their money go in and out of one account. The best way to manage your money is to split it into three accounts. The first account is for your fixed cost. These would typically be your direct debits (bill payments). The second account would be your spending account, and you would pay for travel, lunch at work, going out etc. Your last account is a savings account. You will build this account up with your leftover money after contributing to your fixed cost and spending account.
EMERGENCY FUND. Now that you have your money in order, the next thing to do is build up an emergency fund. This should be a minimum of three months of your monthly outgoings. If you have debt, focus most of your money on paying off your debt and a smaller amount building up your emergency fund. This would typically be 70 percent on debt and 30 percent on your emergency fund.