The number of people in Britain struggling with money is at an all-time high. Financial charities say people are contacting them for help with debts, bill payments and bankruptcy. A survey by the campaign group Debt Justice found that 29% of 18-24 year olds and 25% of 25-34 year olds had missed paying their bills three or more times in the past six months.
The majority (65%) of people do not think they can survive for three months on savings alone without borrowing money. More than a third of British adults have less than £1,000 in savings, according to figures from the UK's Financial Markets Regulator. A survey by Money.co.uk also found that 30% of Brits aged 25 to 64 have no retirement savings at all.
With figures like these, is it any wonder that 75% of people in the UK are worried about money?
The current economic situation is especially scary for young people. Unless you were born with a trust fund (which most people aren't), you're likely part of the first generation to be financially poorer than your parents. Retirement seems impossible, and owning your own home is unlikely. 80% of people in their early 20s worry about not making enough money.
Planning for your financial future early in your career is important, but it can feel overwhelming. The good news is that there are ways to overcome this.
Find your financial attachment style
As a psychotherapist and financial researcher, I work with people to help them increase their financial confidence and find the motivation to start planning. This often starts with understanding what influences your relationship with money.
Attachment theory is a psychological concept introduced in the late 1950s. Your attachment style (secure, anxious, avoidant, etc.) describes your approach to forming emotionally intimate relationships with other people. Some people feel safe in relationships, while others feel extremely anxious. Some people avoid intimacy altogether.
This article is part of Quarter Life, a series about issues that affect us in our 20s and 30s. From the challenges of starting a career and taking care of your mental health, to the excitement of starting a family, getting a pet, and making friends as an adult. In this series of articles, we explore questions and provide answers as we navigate this turbulent time in our lives.
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Attachment styles also apply to money. If you feel confident and secure with your money, you'll feel more secure with your savings and spending. But if the mere thought of opening an ISA or filling out a tax return, let alone planning for retirement, fills you with fear and panic, you may be anxious and obsessed. And if you push money worries to the back of your mind, you're probably avoidant.
Attachment theorists and psychotherapists like myself believe that attachment styles are shaped by early childhood experiences, such as how well cared for by parents or caregivers, and how safe and loved they felt. I think that.
How your family handled money in your early years likely set the blueprint for your financial attachment style. External influences such as education and work experience can also shape this.
Although financial education is part of the UK school curriculum, 76% of children leave school without sufficient financial knowledge to manage their lives. Similarly, financial services such as banks have not helped people develop secure economic relationships. Complex and uncomfortable language creates a barrier between those who know about money and those who need to learn.
Not being able to keep up with finances or feeling like you don't understand money can undermine your confidence in your financial planning abilities and fuel a more avoidant attachment style.
Identifying your attachment style can help you develop a better relationship with money. You will be able to understand and predict how and why you react to your finances in certain ways. And it can give you confidence by reminding you that your money struggles aren't necessarily your fault.
Read more: Why everyone needs to know their attachment style
overcome financial anxiety
Some of the latest economic trends circulating on social media may give you some insight into your attachment style. Do you “budget out loud” (saying out loud why you don't spend money)? This can be a sign that you are financially confident and financially stable. Or do you engage in “catastrophic spending” (wasting money you don't have instead of building a nest egg for the future)? You may be evasive.
A healthy relationship with people and money are both important for our survival and mental health. As an adult, you have the power to improve these relationships. However, because attachment patterns are formed early on, they are difficult to change. Therapy and other support can help you develop healthier habits, as can increasing your financial knowledge.
If you want to change your relationship with money, you need to pay attention to what's affecting you. Money advice on social media may be beneficial and help young people feel empowered to talk about money, but it can further increase anxiety and be filled with misinformation. There is also. A good place to start is the government's Money Helper website for accurate and useful information.