Easy tips to stay on top of your money
As a young student or recent graduate, budgeting and keeping your finances on track may be one of the last things on your mind. After university. Or work. Oh and your social life. Despite knowing that money management is a good habit to get in to, it can often be very daunting to sit down and make a plan for your money and keep on track of what you have coming in and out of your bank account. Below are some of the easiest yet effective ways to manage your cash, recommended by money and finance experts.
One of the most obvious ways to manage your money is to avoid overspending. However, with the majority of young people spending so much time on social media sites such as Instagram, anxiety has become a significant issue when it comes to young people and budgeting. Social media users project romanticised versions of themselves via flawless pictures, wearing expensive clothing or doing luxury activities. This can lead to most young people feeling left behind and as a result, start spending money to keep us, according to Holly Andrews from ‘Keeping it Simple Finance’. This is one of the biggest, and maybe even inadvertent ways to overspend. At such times of subconscious overspending relating to social media pressure, it is important to remember the simple fact that curated lifestyle pictures never tell the whole story. In some cases reality can be the complete opposite of this. Helen Page, group innovation director at B, states that one in five 18 to 24 year olds claim that their mental health is being affected due to the amount of debt they are already in, and more than a quarter believe that they will run out of finances to pay for even the most basic living costs.
In addition to this, financial wellbeing provider, Neyber has found that more employees are worried about financial problems than health problems, with half of them borrowing money frequently just to have the essentials. Due to factors such as brexit, inflation and wage stagnation affecting the economic climate, it is clear why the majority of UK residents are worried about money. For working young people, Heidi Allan, head of employee wellbeing at Neyber, suggests making the most of employee benefits. Lots of employers offer financial benefits such as cost-effective ways to save for pensions, financial education or better loan rates. It is a good idea to see what benefits your employer has to offer.
Iona Bain from Young Money also suggests a few easy steps to help manage money. Firstly she suggests clearing out the clutter. This means stopping any direct debits or regular payments that do not have significant benefits. This includes gym memberships when you don’t go to the gym, no matter how many times you say you’re going to start on Monday. Secondly, look at the area where you can easily save money. Mobile contracts and energy bills can be cut down by simply finding cheaper companies. She also suggests taking the 90% challenge. To do this, you take out 10% of your income as saving and use the remaining 90% to cover your costs. If you can do this every month, you can end up with some decent savings.
Lastly, she suggests changing your perspective of budgeting and viewing it as self-care, we need to look after our finances just as we would look after ourselves. Currently, over 40% of people do not have a budget plan in place. The main reason being that they don’t have the time to create one, as stated by Jossie Ellis from Money Dashboard, a personal finance app. This app acts as a personal finance assistant that tell users what is safe to spend on and what they should try to avoid. Ellis states that Money Dashboard makes money management quick and easy which makes it very useful for young adults. She gives a case study of Ellie Jarvie, a 21 year old, 3rd-year student at the University of Edinburgh. Ellie states that she always found budgeting difficult and never gave much thought to it. Once she downloaded Money Dashboard her finances became more explicit as she was made aware that most of her spending was on nights out and expensive morning coffees. Money Dashboard is another great way to manage money as it highlights exactly which areas you spend most of your money on, in Ellie’s case, entertainment.
If the tips mentioned so far feel like they are still too much work, Everyday Loans suggests a couple of even more easier steps to avoid overspending! They suggest leaving your debit and credit cards at home when you go out. Taking just cash will force you to only spend what you have available with you. In addition, you can move any money that’s left at the end of each month into a different account. This way you can make some savings, even if you just save £20 a month, it will all add up and make a big difference.
As living costs continue to rise and wages stall it’s important that you get into the habit of budgeting and saving earlier.That being said, it is also important to not let the daunting thought of money management consume you. While watching your finances is essential, so is enjoying the money you work hard for. The secret is in the balance.