Happy New (Financial) Year! Today is National Financial Awareness Day and it’s also the chance to restart your financial planning and get yourself back on track with any money goals you may have. But, there are so many resources out there telling you how to be financially literate that it can be difficult to know where to go, what to read and how to set your own financial goals. So, we’ve made it easy and put together some tips and tricks below that you can use to get your financial journey heading in the right direction.
First though, let’s talk about what Financial Awareness and Financial Literacy is. We’ve talked about how to manage your money on this blog before (you can read that article here) and, in short, financial awareness is just that; knowing how to manage your finances not just from month to month but also looking into the future. Whether it’s small daily changes that curb your spending or large money goals to put enough away for your future, it’s all about managing your money so that it works for you rather than working your whole life for money.
So, what can you do to stop financial stress and start your journey to freedom? Check out our top five tips below:
Budget, budget, budget
We’ve mentioned this before in a previous blog but it’s arguably the most important part of managing your finances so we’re bringing it back for a second round. A budget isn’t just knowing what outgoings you’ve got each month; it should cover everything from your bills to spending limits for days out. But, as well as making the budget at the start of each month, it’s also important to update your budget with any expenditures not planned for; this way, you can see at the end of the month where you had additional spending and you can adjust your budget for the next month.
It’s also a good idea to have a yearly overview if you can; say you’ve got a holiday coming up that you need to save some money for. You’re unlikely to think about it in January if you’re not going until December but having a yearly overview will let you know what you need to include in each month (such as a holiday savings fund) even if the actual event doesn’t happen until later in the year. Using a spreadsheet is a good way to start since you can have different tabs for monthly and yearly but it can also be as simple as a notebook that you use to write down your budget each month, whatever works for you.
Divide up your money
Having separate accounts for your outgoings and your savings is key; this avoids you accidentally using money that was intended for savings in your outgoings. Plus, you can earn interest on your savings at some banks if you put a set amount in each month which is great if you’re planning on trying to save the same amount every month.
Get tech to work for you
There’s a whole world of money saving and money managing tech out there and most of it can be contained within the palm of our hand (in our phone). It can be as simple as turning on certain features in your online banking such as rounding up your purchases to the nearest pound and putting the extra money in a savings account automatically. A lot of the time, we automatically round up our purchases in our head anyway so putting those extra pennies aside without even having to think about it is an easy way to save some money and manage your paycheck.
There are also a whole host of apps created just to save you money. Some of these include apps like Money Dashboard which allows you to see all of your accounts in one place and know what you’re spending, manage your bills, track your spending across categories and set budgets for those habits you know need some work. You’ve also got apps like Moneybox which is a savings and investment account app where you can save on your everyday purchases, combine old pensions and also start investing. Given how much of our world is now in tech, utilizing advancements in tech to make our money work for us makes sense.
Don’t splurge on payday
We all know the urge to do some online shopping or go out for dinner once our paycheck hits our accounts; we chase the dopamine rush that comes from being able to spend money on things we enjoy, especially since on payday, we no longer feel as though we have to stress about money. But when 1 in 5 of us spend over half our spare monthly wages within 48 hours of getting paid, we definitely need to take the splurging into consideration and out of our wallet.
Avoiding impulse spending can be particularly difficult for some people and can then lead to feeling upset or regret, with 59% of people, according to Nationwide’s Payday Saveday Survey, regretting their impulse purchases. One of the best things to do is to budget for the month when your paycheck comes in and then leave it alone as much as possible for the first week to avoid ending up with no money at the end of the month or having to dip into savings.
If it sounds too good to be true, it probably is
Unfortunately, as much as we would like it to, money doesn’t normally just fall from the sky. In fact, money very rarely appears out of nowhere so it’s important to be savvy when it comes to scams. We’re not just talking mysterious emails from unknown royalty offering you thousands of pounds in return for a few hundred. Scams are everywhere and, for the most part, are more well thought out than an out of the blue email. We’ll talk briefly about the most common form of scam.
Phishing is one of the most common scams; normally in the form of an email from a bank asking for personal details to confirm payment or something similar. Banks and reputable companies will never ask for your personal details over email and they often won’t ask for you to click dodgy-looking links either.
If something doesn’t feel right, it’s best to be cautious; double-check the email address to see if it looks right or if there’s an extra letter or number in there where it shouldn’t be. Check the link address BEFORE clicking on it; is it a secure site (does it have https:// at the front? If it’s missing the s and looks like this: http:// instead, it’s not a secure site). Even better, google the site it’s trying to take you to and if the site is safe, get to it through a browser search instead of clicking the link.
Phishing can also happen over text so it’s important to be aware and be cautious, especially if something seems off. When in doubt, report it. The same is true for sites or products that seem fake or may not even exist; caution is your friend when dealing with anything slightly suspicious.
Ready for some more money managing tips and resources?
To get you started on saving money, we wanted to let you know about TOTUM cards. If you’re studying a full or part-time course at CAW, you’re eligible for a discounted TOTUM card. With an average saving of over £500, it’s a great way to help save on your finances; for a cost of £12, you will get a TOTUM card, and access to all of the discounts and savings for a year and the card can be bought on a 1, 2 or 3 year basis. In order to get your discount code and confirm your eligibility, please contact us at 01480 422060.
We’ve also got a dedicated Fees and Finance section of our website in case you need some information regarding financing your course and what options you may have. Plus, if you’re stressed or find your mental health suffering because of money worries, we have our Wellbeing page here with all of our resources for wellbeing including free counselling for students.