Looking after Your Money

Have you ever wondered how you would cope if the worst were to happen? Living everyday life is usually busy and robs us off the time to sit and consider what would happen to you, your partner or children if the worst were to happen. Relationship breakdowns such as a divorce, death, loss of employment or long term sickness can make you feel very vulnerable. We have discussed how money can affect your health in a previous post. Looking after your money is another way of looking after your health and wellbeing. It helps you to be financially resilient even when bad things happen in life.

In today's post, we'll uncover steps to take towards ensuring that we are looking after our financial wellbeing so that we can withstand financial pressures and be in a better position to be resilient when there are unplanned financial needs that can often catch people unawares. The first step is to improve your confidence and skills to know what to do, where to go, and how to withstand financial shocks when they happen.

Key steps to improve your financial wellbeing

Have a Plan

What will you like to achieve in a defined period of time. If you have always struggled with money. Your first plan might be learning how to have a better relationship with money. For others, it might be learning how to reduce your debt, or which debt to tackle first. Whereas, for others it might be a plan to start saving more.

Have an emergency fund

An emergency fund is money that you set aside for those unplanned emergencies that can easily put a big dent in your purse. For example, just think to yourself- where will I get money if my boiler were to stop working, and needs replacing, or I have to travel to see family due to an emergency, or you lose your job suddenly. I see an emergency fund as a different pot to my monthly savings. This is because the money in your emergency fund should not replace your savings. You should be able to pay for those emergency situations and still have money saved up for the future. Aim to start putting money aside for for an emergency fund. You can start by aiming for £1000 in your emergency fund and build up.

Be an administrator

You don't need to be an accountant to know how to be financially savvy but you will need to start learning how to be disciplined with money.Budgeting and keep track of your expenses. You'll need skills to manage spending, borrow money and pay down debt responsibly. Analyse your spending habits so that you know where you can make adjustments and cut back to improve your savings. Know the difference between good and bad debt and how to use them. Get comfortable talking about money with our friends, family, children or partner. Remember that being an administrator is a skill that you will need to keep up throughout your lifetime, so get comfortable with budgeting and setting boundaries.

Plan your budget

Budgeting is a habit, a way of analysing all the income coming into your household versus your outgoings. So, gather your documents such as your pay slips, your benefit payments, ask for a receipt each time your buy stuff and make a spreadsheet of your expenses.

Understand your everyday expenses and where else your money goes. Plan ahead- for example, start putting small amounts of money aside for irregular or yearly spending such as birthdays or Christmas celebrations. Often, what makes us go over the monthly budget are those unplanned outgoings and annual payments, such as the yearly boiler service, having an MOT on your car and suddenly being told that you need to replace your tyres and break pads.

Prioritise what needs to be paid first when you get your monthly or weekly wages.. For example, food, housing, council tax and utilities are priority bills as you could lose your home, or services may be cut off. It is advisable to pay yourself first by putting some money into savings before spending on other things. That way, you don't have to think about how you can save because it would have been done before you think about how to spend the rest of your money.

Have a budget Planner

There are different ways of doing this. You may wish to use an Excel Spreadsheet, Bank app/ online banking, Online apps or Online tools. Which.co.uk rates the best budgeting apps, so find what works for you. You can download the budget planner from the money helper website.

Use different pots for different things

Allocate money into different pots out of your main bank account. You can do this by working out how much you need to spend monthly, or annually on specific things and this can be done using physical containers or you can allocate ' digital pots' out of your main bank account and allocate the specified monies to go out by standing orders into each pot. For example, you may have pots for Christmas spending. Holidays and leisure, grocery shopping, annual car service, and so on.

Tips for Saving and Making Your Money Go Further

1. Set a goal, know your WHY for saving
2. Start small and keep it regular
3. Separate your savings pots for different things
4. Don't just save- make sure you're also earning some interest
5. Set up a standing order and pay into savings immediately after payday
6. Use banking and money management apps
7. Take savings challenges and get the whole family involved
8. Build a savings 'cushion'/ emergency fund
9. Plan for your retirement
10. Use the rounding up function in your bank account to save
11. Check what benefits you are due as an employee and take advantage of these
12. Compare prices and switch services or utility
13. Use discount codes or cashback sites
14. Sign up to Money Savings Expert newsletter

Information and support

Here are some useful resources to help with your money journey:

1. Money Savings Expert
2. Which.co.uk
3. The Money Charity
4. Christians Against Poverty (CAP Money)
5. Turn2Us
6. National Debtline
7. Stepchange
8. Citizens advice
9. Unbiased
10. Gov.uk
11. Entitledto
12. MoneyHelper
13. Freecycle
14. Freegle
15. Trainsplit
16. TopCashback
17. Quidco
18. Sell unwanted stuff on ebay and vinted

Conclusion

In summary, looking after your financial wellbeing can have a big impact on your mental health and wellbeing. Developing the habit of saving is a skill you'll need over your lifetime and it is important teach children how to budget and save. The earlier you start practicing the art of budgeting and saving, the better. Try saving more and make it a habit. Don't be discouraged if you slip up the first time, keep trying and start small. Money savings expert is a great website for up to date interest rates and deals and you can subscribe to their weekly emails to stay up to date with information. Download the Money Manual from the Money Charity website.

What have you found most useful and we're keen to hear from you on the topic. I hope you've found this post helpful. Sign up to Ellar Life for more like this.