UK Savings Week: Importance of savings for mental health and ways to keep your money safe
Learn how building savings can improve mental health and read tips on keeping your money safe from a Lloyds Banking Group expert.
Building savings is essential, not just for a financial safety net but also for your mental wellbeing. Savings provide a cushion to reduce stress and anxiety while building confidence.
Emma Morrow from our Advice and Support Service explains the impact of financial stability on our mental health, while Craig Swan from Lloyds Banking Group offers expert advice on keeping your money safe.
Mental health benefits of savings
Financial stress is a leading cause of anxiety in Scotland. Surveys highlight that over 30% of people in Scotland experience significant financial stress every month, according to the Mental Health Foundation. Money worries are linked to feelings of helplessness and disruptions in sleep patterns, affecting overall mental health.
The pressure of living paycheck to paycheck leaves many people feeling trapped, further compounding mental health challenges. An emergency fund creates financial security, offering a psychological safety net during tough times.
This financial security helps people make better decisions without the rush or panic that often accompanies financial strain. Having savings removes the constant pressure of financial worries, allowing people to make more thoughtful, long-term decisions without the fear of running out of money.
Saving money, even in small amounts, helps people feel more in control of their finances. This control reduces pressure and encourages optimism about the future. Starting your savings journey with small, regular contributions to your savings goals can begin to build good habits.
However, it’s important to recognise that, in the current economic climate, with the cost-of-living crisis affecting the budgets of many families across Scotland, it’s okay if you’re not ready to start your savings journey yet. Financial security is a long-term goal. In difficult times, the priority may be managing day-to-day expenses.
“We understand that not everyone can save money, especially with the rising cost-of-living and changes to welfare reform. It can be a matter of choosing to put the heating on or buy food.
“It is okay if you are not able to save. If you are struggling to make ends meet, we want to help you in the best way that we can. That is where our Advice and Support Service can help you. We can work with you to maximise your benefits and help you navigate the complexities of the welfare system. Equally, if you are struggling with debt, our dedicated advisors can work with you and your creditors to find solutions.
“If you want to start saving but don’t know where to start, we can assist you in creating financial statements, understanding your spending habits, and directing you to budgeting tools. This may help you kickstart a savings plan.“
Emma Morrow, Advice and Support Manager at Change Mental Health
How to keep your money safe
While you may not be able to save, knowing how to protect your money is just as critical. Taking small steps, such as keeping your money secure and avoiding fraud, can pave the way for a better future. Craig Swan from Lloyds Banking Group offers useful tips to protect your finances from fraud:
- Use strong passwords: Create complex passwords that include letters, numbers, and symbols. Avoid easily guessable information like birthdays or simple sequences. Consider using a password manager to store your passwords securely.
- Enable Two-Factor Authentication (2FA): This adds a layer of security by requiring a second form of verification, such as a text message code, in addition to your password.
- Monitor your accounts regularly: Check your bank statements and transaction history frequently to detect any unauthorised activity early.
- Be wary of phishing scams: Be cautious of unsolicited emails, texts or calls asking for personal information. Always verify the source before providing sensitive details.
- Use secure networks: Avoid accessing your financial accounts over public Wi-Fi. Use secure, private networks whenever possible.
- Keep software updated: To protect against vulnerabilities, ensure your devices and apps are updated with the latest security patches.
- Set up alerts: Many banks offer transaction and balance change alerts, helping you spot suspicious activity quickly.
- Limit sharing personal information: Be cautious about what you share on social media. Hackers can use personal details to guess passwords or answer security questions.
- Secure physical documents: Keep important financial documents in a safe place and shred any sensitive paperwork before disposal.
- Educate yourself: Stay informed about the latest scams and fraud prevention techniques. Knowledge is a powerful tool for protecting your savings
By following these guidelines, you can reduce the risk of financial fraud and enjoy the peace of mind that comes with safeguarding your hard-earned savings.
For more information on fraud prevention, check out resources like Action Fraud, which provides updates and tips to help you stay one step ahead of fraudsters.
Savings are not just about financial security but also contribute to mental health by reducing stress, boosting confidence and improving relationships. Even if you can’t build up savings right now, adopting safe banking practices and staying vigilant will help protect your finances and give you peace of mind until you’re ready to start your savings journey.
