Making Cents: Money and your mental health
ON THE morning of October 10, I was getting lots of notifications telling me that it was World Mental Health Day. And it’s marked every year on this date to raise awareness about mental health around the world and to mobilize efforts to support those experiencing mental health issues.
And it’s been a rough couple of years for many people, hell it’s still tough going. In a world that has become incredibly complex, I think anything to help promote awareness about mental health that gets people talking and engaged is a good thing.
I remember hearing someone say before that there is no financial well-being without mental and physical well-being. And this makes sense because how you manage your money on a daily basis and how you make well thought-out decisions about your financial future is a difficult task, if you are unwell.
So, I started thinking was there anything we could be doing, to help ourselves from a financial perspective when it comes to our mental health and our well-being in general. And I thought of something that might, well it helps me anyway. And it’s something very simple and practical and I’ll share with you in a moment what it is, and why tennis is the driving force behind it.
I’ve written many articles in the past about setting up an account which is specifically going to be used for a dedicated purpose. And I always recommend you put a name on the account e.g. emergency fund, holiday, retire, new car, sabbatical etc.
You keep it separate from everything else, because it’s easier to manage and because you know exactly what the amount is and what it’s for. It doesn’t get mixed up with other monies that you have other purposes for.
And I think I have another heading we can add to the list, and it’s to create a well-being account.
This type of account is one you use for anything that helps with your mental and/or physical health.
And that could be money you spend on yoga classes, subscriptions to apps like calm, a gym membership, therapy sessions, music festivals etc. literally anything you spend money on that has a direct or indirect impact on your mental and physical wellbeing.
I love to play tennis because I feel physically and mentally better when I do.
So, I’ve recategorized my annual tennis club membership cost, and taken it out of our annual membership costs and moved it to my annual well-being costs.
This might seem a bit over the top, but it works for me because I now realize that some costs are more important than others. My tennis membership cost is more important than my gym membership or any other thing like that, simply because of the feeling and impact it has on me.
You see, playing tennis is much more than hitting a ball over the net for me. That’s just the act of playing tennis. I’ve come to realize, it’s the feeling I get during and after playing, and how much better I am for having played. Well that’s how it feels for me anyway.
And when it comes to reviewing what we spend our money on, some costs are non-negotiable and take priority over others. And if things become tight and monies have to be saved, it’s easier to identify which have to go and which have to stay, because not all non-essential annual costs are the same.
I’ve come to think that well-being costs aren’t non-essential, they’re 100% essential and should be right up there with our other essential monthly outgoings, they are that important.
Which is why they have now formed a new category of expense in a monthly budgeting tool, I use with clients of mine. Before these type of costs would fall under annual memberships because (a) there wasn’t an alternative offered and (b) I don’t think people ever thought deep enough, well I didn’t anyway, to think a particular cost was actually more of a benefit to their physical or mental health than anything else.
Like me, they probably subconsciously knew it was, but they were never asked what the outcome of a particular expense was. And thankfully I think we can now because much of the stigma with mental health issues and how we talk about and deal with them are improving.
Okay, the key with setting up a separate account for this or any other purpose for that matter is to ring fence an amount that can only be used for the specific reason it’s intended for.
And the % your save or spend on this category will depend on your income and outgoings.
Everyone has priority expenses that must be paid i.e. mortgage, rent, food, utilities, insurance, family expenses etc. so it will depend on what excess income over outgoings is available that can be set aside.
And for some, they will be able to save a higher % of their income than others, but if you’re looking for a good rule of thumb guide, I think somewhere between 3% and 5% of your net monthly income is a good number.
But if 3% is a stretch, that’s fine, aim for 1% or 2%, whatever you can afford. And if that’s 0% at the moment, that’s okay as well, when the cost-of-living eases and/or your income increases it’s something you might revisit.
And some people are fortunate because their employer can help with this outlay.
There are proactive companies who offer a sum of money to employees each year where the employee can choose what they want to spend it on. It could be towards a gym membership, health insurance costs, financial advice and so on, and this really is a great offering and is something employees really value. And it would be great if all companies were able to offer this type of benefit, regardless of how small that additional payment might be.
Anyway, whether you have to fund it yourself in its entirety or it’s partly or fully funded by others, you need to consider putting one in place.
And again, the reason for having this dedicated account in place is to help towards improving your physical and mental health and to reduce stress levels.
For some, spending money on ‘things’ might reduce their stress levels in the short term but the danger with this, is that it’s just a quick fix because in the long term it could lead to high debt levels which only increases stress levels further. For what I know, and I don’t know much, I think mental health is less retail therapy and more other forms of therapy.
Having said that, if spending money on clothes or gadgets each month works for you, that’s fine, it’s just important you stay within a set amount of money you allow yourself each month. If you do, I think you’ll feel better knowing that this guilt free spending won’t adversely impact any other areas of your finances.
I think we all feel stronger physically and mentally when we are proactive, and that starts when we take positive steps to take care of ourselves and perhaps having a dedicated well-being account that is specifically used to fund activities will help in this regard. And as I said already, I think some expenses are more important than others and whilst playing tennis for example and the cost associated with it might seem to be an indulgence, for me it isn’t. It’s more than just a pastime and a hobby, it’s good for my head and my body.
Liam Croke is MD of Harmonics Financial Ltd, based in Plassey. He can be contacted at [email protected] or www.harmonics.ie