New findings show women are at a higher risk of having their income fall than men, with 48% reporting an income drop in the last month.
Now is the time to check your financial wellness.
New stats have found that women are ‘facing a deeper financial hit from the pandemic than men’ – that is, the number of women working for five or less a week has doubled in the last quarter, Centre for London reports.
As pubs, restaurants, rooftop bars and gyms reopen once more, it’s normal to feel worried about the amount of money you might be spending. Months of lockdown weren’t the most fun, but they were good, for most, when it came to saving money. With society largely closed, you saved on the cost of your morning Pret coffee, after work All Bar One drinks and weekend meals out, too – all of which quickly adds up.
“You’ve gotten into routines of cooking at home instead of at restaurants, exercising outdoors versus spending on gyms: our spending has changed in a million ways,” shares Brittney Castro, Mint‘s certified financial planner. “Revisiting your old spending habits after a year with major changes to your lifestyle and routine may be jarring for some.”
We’ve spoken to Castro and asked for her advice on dealing with money anxiety and protecting your financial wellness as the world reopens. Keep reading.
Introducing financial wellness: everything you need to know
What is financial wellness?
According to the Financial Educators Council, the term simply refers to ‘effectively managing your economic life’. The Consumer Financial Protection Bureau further adds: “Well-being is defined as having financial security and financial freedom of choice, in the present and in the future.”
Essentially, it’s being rational and organised with your finances – being on top of your incomings and outgoings, and making sure you’re managing your finances in a way that makes you feel good and able to live your life with full financial freedom, whatever that looks like for you.
Why is now a good time to take check of your financial wellness?
Good question. “For some people, the last year of quarantine and working from home meant that their social calendar completely cleared, they weren’t traveling for work or leisure, and generally weren’t spending as much money — meaning, they were saving more than ever,” she shares.
However, for others, the impact of the pandemic meant job loss, life changes, or emergencies that their finances weren’t prepared for, causing wallets to be tighter than ever.
Now that the world is opening back up – and as more individuals get their vaccinations and with the economy rebounding in certain instances – people are expecting to spend on social outings like they did pre-COVID. “If you’ve gotten into a good routine of saving, or alternatively, are struggling to make ends meet and feel compelled to spend like you once did may feel nerve-wracking and anxiety-inducing,” she continues.
Why do women need to check in on their financial wellness right now?
The most recent ‘Snapshot of Londoners’ survey showed that the number of women working paid jobs for five hours or fewer each week doubled between September and January.
Findings highlighted that women were at a higher risk of having their income fall than men, with 48% reporting their income had dropped in the last month, despite incomes remaining steady for men.
So why women? Castro reckons it’s because they’re often in caregiving roles. “Most schools enforced remote learning, and a lot of working women had to reprioritise taking care of their kids at home, while also working from home, without school and daycare to help out,” she explains. “That meant women taking time off of work, or if self-employed, not being able to work as much in order to be able to take care of their kids.”
“This all had an impact on women’s incomes and finances.”
Castro has some advice, if this resonates with your current situation. “Be gentle with yourself. Schools are beginning to reopen, and now is a good time to review your finances and see what you can do now to get back on track. That might include rebuilding your cash cushion if you had to tap into it to cover a shortage in income last year or pay down debt,” she explains.
Whatever the case is, it’s always wise to revisit your financial goals and situation each year to make sure you have the best game plan as life continues to evolve, she adds.
We’ve covered female unemployment – and how to safeguard your career – before, so do read that advice should you need, too.
How can I protect my financial wellness? 5 tips
Most people don’t talk about how financial stress and worry affects their overall health, but it’s really important too, the expert shares.
“Making a plan for your future can actually help you feel a sense of control and improve your mental health,” she explains.
Take a step back and use the following tips to help you keep up with your savings and long-term financial wellness.
1. Review your spending regularly
Castro advises committing to weekly check-ins to review your budget and spending, and tracking your progress to ensure you are sticking to your healthy money habits.
“Even when the world starts to open up and you find yourself eating out again, spending money on trips and so on, it’s important to keep on top of this,” she shares.
Certain apps, like the Mint app, will help highlight where you’re spending more money, which in turn will help you assess whether to dial back in certain areas, or tweak your budget to reflect changes in your lifestyle.
2. Build an emergency fund
Having an emergency (or rainy) day fund, which is a savings account made up of three to six months of committed monthly expenses, is necessary throughout all stages of life, Castro shares.
“This year has made most of us understand the real-life importance of having one,” she goes on.
3. Automate, automate, automate
One of the easiest ways to save money, and Castro’s opinion the only way, is to set up automatic savings contributions every month.
The expert continues: “If you do this, your savings will climb every month without you even having to think about it.” Sounds like a plan.
4. Set (and review) your financial goals
This one’s really key when it comes to financial wellness.
“Ask yourself, why would you ditch your financial goals just because the world is opening again?“
“It’s best to find a balance with your money,” she goes on. “Aim for one where you can still commit to your financial goals and have some spending money to enjoy in your present life,” she reccomends.
Finding that the goals you made last year are no longer relevant or a priority for you? Then it might be time to embrace a new direction and focus your financial goals, the expert shares. “You should re-evaluate your financial plan with life changes (or, every year),” she says. “Most of the time, it’s simply a matter of sticking to your financial goals over the long haul and not constantly changing them with every eb and flow of life.”
5. Invest in yourself
Last but by no means least, you can’t prioritise your finances if you’re not prioritising yourself, first.
“Prioritise self-care and factor it into your budget – it’s always been one of my biggest tips for clients,” shares Castro. “We all need to make sure we are finding ways to spend time and money wisely to take care of ourselves from a holistic well-being point of view.”
Final note: “Whether it’s carving out time to do a day trip in nature or hiring a professional licensed therapist, self-care is more important than ever, and should be considered as such when we map out our budgets.”