Spend Smarter Guide
Let’s talk about financial planning
25 October 2023
Talking money and financial planning isn’t exactly fun. It can make most of us feel awkward or uncomfortable. Yet managing your money responsibly is important and will help you avoid the risk of overspending in the good times and make it easier to cut costs when circumstances change.
Read on for our top tips to plan your finances responsibly.
This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.
Think needs before wants
Make a list of your essential outgoings, like rent or mortgage, groceries and commuting costs, as well as any debt payments or savings contributions. Subtract those from your monthly income to see what you have left for the fun stuff.
Build out your budget and keep track of it – write it down, use a money management app, or keep separate pots in your bank account. When you know what you have to spend, you’re more likely to stick to it.
Keep it realistic
Always ask yourself if you can realistically afford what you’re thinking of buying. If you’re likely to spend more in certain months, plan ahead and save accordingly. When you plan for it, you’ll still get to enjoy your money without the risk of overspending and the stress that may come with a debt you can’t pay.
Consider how you pay
Spreading the cost of a bigger purchase over time and splitting it into more manageable payments can help when it comes to budgeting or covering an unexpected need. But if you’re not careful, it’s easy to stack up multiple Buy Now Pay Later plans which may not fit in your monthly budget.
When using a Buy Now Pay Later scheme or an interest-free credit offer, make sure you have a plan for how to repay it and keep note when they are due so you include it in your monthly budget. If you’re forgetful, set up standing orders so there’s less chance you’ll accidentally miss a payment which can incur a charge and negatively impact your credit file. Find out more about your credit score and how to improve it here.
Build an emergency fund
Add regularly to a savings account that’s easy to access. Ideally, you want enough built up for 4-6 months of living expenses and debt repayments if you find yourself without an income. It’ll help cover any bigger, unexpected costs too, like car and home repairs.
Plan to get old
It’s never too early to start saving for life after you kiss goodbye to the daily grind. It's a good idea to start contributing to a pension as early as you can.
Stay safe
Being smart with your money isn’t only about how you spend it, it’s also about where you spend it. When shopping online, stick to reputable vendors and check for the padlock symbol in your address bar which shows the site is secure. When you check out, confirm what currency you’re paying in to avoid a bad exchange rate or high conversion fees. Look out for the logo of a trustworthy payment platform to ensure your money is in good hands.