How to Invest Money Wisely and Stay Stress Free

Money has a way of keeping us up at night. Whether you are worried about rising debt, dwindling savings, or pension investments, financial anxiety hits everyone at one time or another.

A recent study by MoneySuperMarket found that 51 per cent of UK adults are regularly anxious about their finances[1], and a third said that they believed financial stress was having a negative effect on their health.

But if you take some time to address your money worries, you can find a way to reduce your financial anxiety while still making good investment choices.

Here are a few tried and tested tips to investing money wisely and staying stress free…

1. Choose long-term fixed rate investments

Do stock market fluctuations make you break out in a cold sweat?

If so, you may be better off investing in long-term bonds instead. There are no surprises when you invest in fixed rate bonds – your money is tied away for a certain amount of time, and you know exactly how much you will be getting in interest by the end of it.

Just shop around to find the best rates for you, then invest your money (ideally within an ISA wrapper) and just forget about it until the end of your investment term approaches.

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2. Make 6 April your ‘ISA Day’

ISAs can boost your savings by shielding them from taxation, but there are so many ISA options on the market that it can be difficult to choose just one or two accounts.

The sheer choice available can be overwhelming, so try reducing your stress by setting aside one day a year to make all your ISA decisions. You may decide to split your allowance between different ISA types, for example.

Ideally, this day will be around the 6 April so that you can make the most of your tax-free allowance for the tax year ahead.

Once you’ve chosen the best account (or accounts) for you, simply set up a direct debit for the rest of the tax year and relax!

3. Set up Price Alerts for Stocks and Shares Investments

If you are investing in stocks and shares, it can be tempting to check in on your portfolio multiple times per day.

However, watching stock market fluctuations can easy lead to stress and analysis paralysis – especially if you aren’t sure whether to buy or sell. The reality is that small fluctuations in your portfolio are normal – you don’t really need to take action unless your stock drops dramatically in value.

Alleviate your worries by setting up price alerts with your investment platform or broker so that you are made aware whenever your stock holdings fall below a certain threshold.

4. Diversify your Investment Portfolio

When you have a diversified portfolio, you will be less stressed about volatility or price drops in certain areas.

For instance, a stock market crash is likely to cause a lot less concern if you know that you are also keeping some of your money in cash, properties, and alternative finance as well.

Hire a financial advisor to talk through your profile and the options that are available to you. Then create a balanced portfolio that isn’t too heavily weighted towards one asset class.

5. Limit Portfolio Reviews

It’s important to review your portfolio regularly to make sure that it is still performing the way you expected.

However, if you check it too often you run the risk of giving yourself more to worry about, and tempt you to micromanage and switch out your allocations needlessly.

Instead, check in with your portfolio twice a year to make sure that it is still doing exactly what you need it to do. If your circumstances have changed, you can increase or decrease your monthly savings, or shift your portfolio towards a more conservative or risk-aware position.

By limiting your portfolio reviews, you can make informed and calm decisions that are not influenced by the most recent financial headlines.

6. Use Technology to Your Advantage

There are a wealth of apps and websites which offer to help you manage your finances and reduce financial stress.

If you regularly struggle to make ends meet, you may find a budgeting app like YNAB to be helpful.

Or if you find it difficult to save, apps such as Acorns and MoneyBox will automatically round up your purchases to the nearest pound and invest the change on your behalf.

Whatever your financial concerns, there is almost certainly an app that can deal with them on your behalf. Just make sure that the app you choose is trustworthy, read the reviews, and reap the reward

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6 ways to invest wisely and stay stress free


Kathryn Gaw

Kathryn Gaw is a financial journalist based in Belfast, Northern Ireland. She has been writing about personal finance and investment trends for more than a decade, and her work has been featured in the Financial Times, City A.M., the Press Association, and The Irish Independent, among many other publications.