Financial Wellbeing Tips

In August I was on BBC Radio Cambridgeshire talking about managing your finances.  As is the case with a lot of these media segments, I only had a few minutes to share some strategies, so I wanted to create a more comprehensive list that people could refer back to.  The current cost of living crisis has made a lot of us realise that we have never really got on top of our finances.  Some of us have been struggling for a while, others just about managing.  Most of us could probably do better, yet most of us have never been shown how to understand or manage our finances.

This isn’t a comprehensive list, just some of the tips and strategies that I share in my Financial Wellbeing talks.

  • You need to understand where your money goes.  Use aggregator apps to get a full breakdown of all spending.  Know the total costs for your core living expenses and items like transport, pets and holidays.  Examples of apps you can use are Moneyhub, Money dashboard, Emma and Nova.  Go here to find out more: https://moneytothemasses.com/quick-savings/tips/the-best-budgeting-apps-in-the-uk-how-to-budget-without-trying
  • Check all your direct debits and standing orders.  We don’t see most our bills, so we don’t know what we’re paying for and we don’t see the price increases.  You can do this by going through your bank statements or through the payments section of your online banking app.
  • Check subscriptions and cut out anything you haven’t used for 6 months.  Either you will be offered a discount or you discontinue.  Either way you save.
  • Don’t sign up for any free trial periods where you have to give credit card details.  Don’t download apps where they need credit card details.  Watch out for introductory offers – they are often difficult to cancel or unsubscribe.
  • Watch out for lifestyle creep. Have you ended up with Sky, Netflix and Amazon Prime? Have you got 2 Prime subscriptions on the same household?
  • To reduce spending, introduce friction and feedback. Friction means making it harder to spend – disable 1-click and don’t store credit card details online. Feedback means becoming more aware of the spending process. The best way to do this is to only use cash when you go shopping and a debit card instead of a credit card. Using credit pushes the pain of payment into the future where it becomes less real and this causes us to spend more – anything up to 30% more !
  • Avoid Buy Now Pay Later schemes – they also cause you to spend more. The trick of breaking down a cost into 3 or 4 payments means we only focus on the first amount and we get fooled into buying things we can’t really afford. We become overly optimistic about our future ability to pay and we can get caught out later on.
  • Don’t pay any unnecessary charges. Set limit alerts for credit card and bank accounts so you get warned in time. Overdraft interest rates can be as high as 50%.
  • Use comparison websites to make sure you’re getting the best deals on your phone, internet and insurance.
  • Pay off expensive debt and build an emergency fund; any amount will do. Without some kind of buffer, you will always be living in fear of the next unexpected expense. And there are always unexpected expenses.
  • If you’re going abroad use cards that don’t have charges or fees on overseas purchases or cash withdrawals. A simple internet search will tell you the best ones that are currently available.
  • Take some time to do research on all financial matters. There is lots of good advice available from sites such as https://moneytothemasses.com/ , https://maps.org.uk/, and https://www.boringmoney.co.uk/.
  • Look after yourself. When you have money stress you need to ensure that you look after your mental and physical health. Stress affects your ability to think and it has an impact on your body. Long term stress affects your immune system, so it can make you sick. When you’re under financial stress, you need to make good decisions and you need to avoid making bad decisions. You need to be able to take advantage of opportunities like changing jobs or applying for better jobs within your organization.
  • Engaging with your finances can feel hard and make you uncomfortable. I understand that. But, just because it’s hard, doesn’t mean we get to avoid it.

I hope you find these suggestions useful. if you’d like to understand more about money or just talk about things that are troubling you, please use the contact form or the link below to book a free money chat.