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Money can be an ongoing stress for many people, particularly in today’s economy with a cost-of-living crisis, inflation and rising bills.
There can also be a lack of education when it comes to making your finances work best for you, from knowing how to budget, understanding which is the best savings account to open, and knowing how to invest.
We spoke to the head of personal finance at Moneybox, Brian Byrnes, the managing director at Evelyn Partners, Jason Hollands, and the director of financial support at Santander, Mark Weston, about their best and most important money tips that people should know.
Set some money aside for emergency funds
New research by Santander, carried out in April by IPSOS with members of the UK public, shows that one in five (20%) respondents do not save anything from their personal income across the year. However, Weston says saving is important.
“We do recognise that the cost of living and inflation over the last few years has made it much more difficult for people to save,” says Weston.
“However if people do have the ability to save a little, it is a real benefit for things such as rainy day funds or for the future. This means if you have an unexpected expense, having those savings takes pressure off.”
Make sure you’ve got the best value financial deals
When it comes to household finances, investments or utility bills, Weston says keeping on top of the best deals out there is crucial.
“Whether the deals are for your energy costs or anything else for that matter – make sure you’ve got the best value for money for the service that is needed,” Weston says.
“Also make sure you keep an eye on all those expenses and don’t just let them roll over every month.”
Do a household budget
“It’s important to understand and make sure that your outgoings aren’t greater than your income or you’re going to end up with a problem and possibly in debt,” Hollands says.
“It can be very easy to build up added costs, such as subscriptions that you don’t actually use, so it’s important to be aware of those things through a budget.
“When designing a budget for yourself, think about the things you know are essential. This would be the cost of your housing and groceries for example. Then you have your wants, which are the luxuries and nice things to have that you could live without for a period of time. Prioritise what you need most and keep the other things to the end of your budget.”
Clear up debts
“It’s really important to try and clear any debts, particularly those with high servicing costs like credit cards. People of course have mortgages and other things for a longer term that they aren’t going to clear right away,” Hollands says.
“However, if you’re paying high levels of interest on a loan or credit cards, you really need to get those under control before starting to put money aside for the future.”
Use spare change to invest your money
Byrnes says that rounding up spare change and using it to invest could be done rather than saving this money.
“The reason that works is because investing tends to concern or scare people,” he says. Byrnes explains that the initial step of putting money into investments or the stock market can feel risky.
“However we found over the years with clients that the spare change which feels less like real money is easier rather than a big lump sum. It can also break down the barrier to investing and as time goes on, they will start to see the benefit of it without having to necessarily take a big leap with larger sums.”
Automate finances in the summer months
“We have found with customers that it’s actually easier to save during the winter where there is less social pressures to go out,” Brynes says.
“When we get into the summer months and various social invites such as weddings tend to pop up more – it is important to automate your finances and pay yourself first.
“This should happen on your pay date,” he says. “Put money into your emergency fund, your savings account, your investment accounts and ensure they come out automatically on the first day you get paid. This is more successful for savings in comparison to doing it at the end of the month – especially at this time of year.”
English (US) ·