Creative Counselling: A Margin of Happiness
by Marie Bruce
Last month, we looked at debt and how it can have an adverse effect on your mental health. This month, I want to explore the flip-side of debt, and how saving money can actually benefit your state of mind.
Saving money comes more easily to some than to others and while the amount you can save will depend on your personal circumstances, we should all be putting something aside for a rainy day, because in a nutshell, having savings will give you peace of mind.
Having money set aside in a savings account will give you a financial cushion to ease the blow of an unexpected bill or emergency. There is never a good time to have the car or the boiler break down, but if you have savings to fund those repairs, it won’t eat into your monthly salary. More importantly, if a big ticket appliance such as a fridge-freezer or a computer breaks down and you don’t have any savings, you will probably have to turn to credit to buy a new one, which means you will also be paying interest on the initial cost and accumulating debt. So having savings can quite literally save you from debt.
The Victorian novelist Charles Dickens coined the phrase ‘a margin of happiness’ when referring to excess income and the peace of mind it creates within the individual. To have a margin of happiness means that you have more money coming in than going out. The bigger the margin, the more comfortable you are. To find out what sort of margin you have, add up all your monthly bills and essential expenses to get a monthly figure of what your outgoings are, then subtract this from your basic monthly salary. The figure that remains is your personal margin of happiness and ideally, it should be no less than 10% of your salary.
Try to improve your margin of happiness by saving a set amount each month – and a little extra as and when you can afford it. The easiest way to do this is to have an amount of money automatically deducted from your salary and put into a savings account on the day you get paid each month. In this way, you treat your savings just like any other bill, building up a financial cushion for emergencies. You can also use money from a second job or from working overtime to boost your savings account. Start to think of your savings as an essential expense each month and don’t dip into it unless you absolutely have to.
Once you have a healthy balance in savings, you will begin to have more options and less stress. For instance, you could choose to use some of your savings to pay off a debt, or to invest in further education or training, which could lead to a higher salary. In addition, savings can help you to leave a job you hate more easily, while being in debt can keep you trapped there for the long term. Having savings gives you breathing space and protects you from financial fear. The bigger your margin of happiness, the more protected you will be from the unexpected.
If you are on a very low income, or living off benefits, then you might think that saving money is impossible. It isn’t, and while you will be saving smaller amounts, it is still good for your mental health to have some money in a jar, even if you just save up 50p coins, because it will be visual proof that you have more than enough. This will also get you into the habit of putting money to one side and, more importantly, not touching it. Your margin of happiness might be miniscule, but so long as it is there, you are on the right track. When your circumstances improve, you will be able to increase your margin of happiness too. Having the visual cue of seeing money in a jar can help to keep your mind focused on abundance, rather than scarcity-thinking and again, this will help to keep you positive about your finances through a lean time. Having some savings can also help ease the trauma of sudden benefit changes, or moving from benefits to a salary and work-related income.
Saving is a habit. It comes naturally to some people, while others find it more of a challenge. Once you get into the habit, though, you will have fewer money worries, less debt and a heightened sense of being in control in an unpredictable world. Aside from saving up for your old age or a deposit on a house, here are a few basic things we should all be saving money for:
Emergency cushion: money put by for unexpected expenses
Car Expenses: insurance, tax, MOT, breakdown cover and repairs
Life: Christmas, birthdays, holidays, pets
The future: weddings, a house, old age, education, retirement
Hobbies: ice-skating, dancing, piano lessons; whatever your hobby, set money aside for it each month and you’ll never have to cancel it from lack of funds… Life should be fun, but the fun has to be paid for in cash, not debt!
In addition, if you have savings in the bank and an event comes up that you want to attend, you could use some of your savings to purchase a ticket rather than having to wait until payday and risking the event being sold out, or racking up a credit card debt. Borrowing from yourself is always cheaper than borrowing on an overdraft or a credit card, and this is just one of the ways in which your savings serve you.
I hope that this month’s column has helped you to see the mental health benefits of saving money. It really is a form of self-protection, and the fact that it can also ease stress levels is an added bonus. Taking responsibility for your life means taking responsibility for your finances, and being in control means having funds in place to meet those unexpected expenses that life likes to throw at us every now and then. May fortune favour you! Until next month,
Marie Bruce x
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