The budget is just a few weeks away and I’m losing sleep. I wake up at night worried that I made a mistake by putting my oldest son in private education because if the expected thing happens, I won’t be able to allow my youngest son to go there too. I’m worried about what decisions I should make in the coming weeks to lessen the impact of the changes. Should I sell shares out of my Isas to avoid rising capital gains tax? Or not, because I think they are good investments and I am afraid I will regret selling them. Besides, where would I put that money anyway? I listen to the various opinions I’ve read and heard in my head all night. How can I make it stop?
BK, by email.
Tax changes that will affect private education are causing anxiety among parents. Pictured: Chancellor Rachel Reeves
It’s natural to feel anxious before a major financial event, especially when the potential changes are likely to impact your family’s well-being and lifestyle.
However, instead of torturing yourself with endless questions, try to understand and control your anxiety so you feel more in control and make decisions with a clear mind.
First, it is essential to distinguish between concerns that are realistic and useful and those that are rooted in “catastrophization.”
Catastrophizing means imagining worst-case scenarios and thinking about outcomes that are unlikely or, at least, exaggerated versions of what could really happen. For example, you may be afraid that you will not be able to financially support both children in private education. Can you imagine that the entire impact of VAT will be passed on to parents, when this may not be the case?
Whenever you catch yourself reflecting on negative outcomes, try taking a step back. It’s okay to acknowledge your concerns, but gently remind yourself that these are worst-case scenarios. They may never materialize, and even if some changes come into play, they’re unlikely to play out exactly as you imagine.
Second, distinguish between useful information and that which induces fear. The avalanche of information and predictions surrounding a Budget (particularly this one) can be overwhelming. Constantly exposing yourself to speculation can feed your anxiety, making it difficult to separate facts from fear-driven rumors. To protect yourself, consider filtering the information you consume. Ask yourself if what you are reading or hearing is informative or simply adding to your fears. Are these articles, comments or conversations based on fact? Are they helping you make informed decisions or just adding to the noise?
But also, when reading financial information, consider what you decide to keep. It’s often easy to obsess over the various tax increases being considered and miss the part of an article that says, “experts think it’s unlikely all of them will be implemented.”
Are you retaining and holding on to information that feeds your fears?
Third, focus on what is within your control, especially over the next few weeks. Your concerns about private school for your children are valid, but this decision is not immediate. Any policy changes that affect school costs will take a few months to implement, allowing you to carefully consider your options when the time comes.
With stocks, you now have more control over sales to avoid or maintain higher taxes. However, the predictions may not be accurate and you may have sold stocks at an unfavorable time out of fear. You are the only one who can make that decision, but try to make sure you are properly informed before making it, rather than being reactive and responding to catastrophic fears.
Empowering yourself with knowledge can help you see these options more clearly. It may also be helpful to seek professional financial advice, not only for objective financial guidance but also for potential strategies that take long-term goals into account.
And remember: financial decisions rarely have one right answer. Each approach has advantages, disadvantages and risks, whether you decide to sell preemptively or hold and risk higher taxes later.
Asking yourself if these are risks you can take is better than trying to figure out what the “right” option is.
Finally, remember that worrying never changes the outcome. Sometimes we have, on some level, the belief that worrying is productive, that it can protect us in some way because if we think about all the possible scenarios, we will have more control. However, that is not the case: worrying excessively will only cloud your thinking. The best thing you can do is prepare within reason and remember that overthinking will only make the next few weeks more difficult.
Consider trying something new to help you relax. Apps like Calm or Headspace, which offer guided meditation and breathing exercises, can be very effective. Practicing mindfulness, especially before bed, may help you break the cycle of anxious thoughts. Making a rule to turn off your phone an hour before bed, for example, can allow your mind to calm. By prioritizing rest and practicing self-care, you will not only feel better, but you’ll also be able to approach the next budget announcement with a clearer, more focused perspective.
Ultimately, managing financial anxiety is about staying balanced, informed, and flexible. Allow yourself to take things one step at a time and trust that, equipped with the right tools, you will be able to make thoughtful, well-considered decisions no matter what the future holds.
Do you have any questions for Vicky Reynal? Email vicky.reynal@dailymail.co.uk
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