Our Top 6 Tips for your Financial Wellbeing

We could all tighten the purse strings every now and again but it’s always easier said than done. Money worries are one of the main causes of stress, at whatever stage in your career. These worries can soon become much worse if we don’t keep track of our spending. That’s why, as part of wellbeing week, our Finance Director, Qaiser Akhtar, has given us some words of wisdom on financial wellbeing to help us all save some pennies.

Get advice early

If you have debts and are struggling with repayments always get advice or speak to your debt provider early. Sticking your head in the sand only makes things worse. Taking help and advice can put you on a debt management plan which can include stopping interest charges or potentially take a repayment holiday to get you back on track.

Interest on debts is usually charged daily and therefore focus on paying off the debt with the greatest interest charge. These could be credit cards or pay day lenders. It may also be cheaper to consolidate your loans with one repayment or transfer the balance to a zero-rated card and prioritise repayments to clear the debt. Knowing your options is half the battle.

Get financially savvy

There are many ways you can save money when buying every day products or services such as clothes, gifts or even insurance. By using a cash back website such as www.Quidco.com or www.Topcashback.co.uk which are free to sign up to, you can receive cash back for simply being redirected to a retailer’s website. You can get offers such as 10% back on Boohoo purchases, 5.25% on GAP purchases even £80 back on purchasing car insurance from Admiral. The retailer pays the cash back site for sending traffic to its website so the cash back site pays you some of this.

To get even more savvy, if your company uses the benefit package Perkbox, you can purchase vouchers for many retailers at a discount. For example, save 10% on GAP so you pay £90 but receive £100 worth of vouchers or save 5% with John Lewis.

Finally, you can combine the two together for instance a £100 shop at GAP get 10% off from Perkbox, go through a cash back website and get a further 5.25% (although note the cash back is only on the Net value i.e. amount excluding VAT), therefore you can still buy a £100 worth of goods but just pay less!

Knowing where your money goes

One of the most important tips is having a good understanding of your finances – do you know what you are spending your money on? Most people say yes but a typical £3 morning cup of coffee each day sounds relatively small on its own, but in the month that’s £60, or £180 in a quarter just on coffee!!

Go back through your last 3 months of bank / credit card statements and allocate your spending such as lunch, clothes, petrol, this will give you a clearer understanding of where your money is going. Next step is to break these expenses down into fixed and variable – fixed maybe things like mobile phone bills, car insurance, mortgage etc, whereas variable is more like entertainment, food or clothes. The variable costs are where you have greater control as you can usually cut back on these or shop at a cheaper alternative, but you can only make these decisions when you know where your money goes.

There are new up and coming Fintech banking apps that help categorise your spending automatically – apps such as Starling Bank or Monzo Bank provide a breakdown of your spending into easily digestible chunks so you can track your money better, set weekly goals and receive spending insights.

Watch the pennies

When saving for a particular purchase, like a holiday, car insurance or deposit, try and break these down into small, regular targets. For example, when you have large annual expenses, such as car insurance, saving £20 per week over a year puts away £1,040! This helps to ease the burden when these expenses occur.

You can put this in another account (savings or an ISA) and set up a standing order, that way you take it out of your current account before you have the opportunity to spend it. Small regular amounts seem more manageable when aiming for a large target – you can make a small change in your spending habits, such as buying a coffee every other day rather than every day and put away nearly £30 per month.

Avoid impulse purchasing

This is definitely easier said than done but impulse purchasing takes away all of your financial savviness. Retailers know we are enticed by a good deal and therefore you will always find offers around checkouts and “sales” with limited timescales which make people react in ways they wouldn’t otherwise.

Before you purchase anything, research is key. Know what you want to buy and research the price using websites such as pricerunner.com and Google Shopping, these sites simply search websites and return the result cheapest price first (note: always watch out for delivery costs as these sometimes are not shown in the search results).

Budget, budget, budget

All of the above comes together in a budget. A budget doesn’t have to be complicated, a simple receipts (money in) and expenses (money out) spreadsheet will help you see the wood from the trees. A budget also highlights pinch points, so you can plan ahead and take action before it’s too late. By using the concept of fixed and variable spend, you can immediately see the impact of your decision making, like having a coffee every other day will see your expenses reduce by £30 per month and over the course of the year this can add up to £360 which can go towards paying off debt or towards a saving target.

Budgeting also helps set short term targets i.e. you can give yourself a budget of £20 for lunch each week, by Wednesday if you have blown the £20 then you make homemade sandwiches for the remainder of the week. Cash flow budgeting is critical for all aspects of life including businesses like ours, we forecast on a weekly basis and as we say in finance, “Cash is king, and we need to be all over it!”

Budgeting isn’t always easy, but hopefully Qas’ tips can help you stay on track so those money troubles don’t get the better of you. You can always seek independent advice from the Citizens Advice Bureau.

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