When I was in higher education, I was awful with my finances. I wasn’t taught about personal finances while I school. My mentality could have been summed up as “Why save money when you can spend it?”. 

I got my first job at 16, and due to some fortunate circumstances, I was paid like an adult. I loved nothing more than to bring my bank balance down to zero by the end of the month. Saving money didn’t cross my mind. I was in a charity shop when a £3.24 payment bounced on my card. The embarrassment of all those eyes watching me as if to say “seriously?” gave me a big kick up the backside. 

However, the financial industry uses a lot of jargon. I had to spend so much time figuring out the steps I needed to take to reach my financial goals. 

It can all get very confusing. Therefore, I created this article to help anyone to quickly improve their finances. 

Next level budgeting

Take control of expense tracking with your phone.

Have you ever checked your balance and wondered “where did all the money go?”. Money is a powerful tool, yet most people choose to go broke, trying to look rich. 

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No matter how much you make, you must know exactly what you spend your money on. Here are some categories you should track: 

  • Accommodation – Moving somewhere cheaper or renting out your home could leave more money in your pocket.
  • Utilities – Money Saving Expert’s Cheap Energy Club enables you to quickly compare energy providers. We saved £60 a month.
  • Entertainment – Instead of having several subscriptions, it is worth putting it all under 1. Amazon Prime comes with discounts, movies, tv shows, Kindle Books and more. This has helped us to save £36/month.
  • Phone bill – Contract phones are popular because they enable you to get the latest phone, and repay over time. However, should you choose to go payg, giffgaff offers some excellent deals.
  • Personal hygiene – Name brand hygiene products are usually made in the same factory as store brand products.
  • Luxury items – It is nice to ‘treat yourself’ every now and then, but could you be spending too much on unnecessary items?
  • Debt repayments – Paying more than the minimum monthly repayment should always be a top priority.

Once you know where your money is going, it becomes much easier to make an informed decision on your budget. 

You can track your expenses in a spreadsheet, but that takes some time, and it is easy to forget. I recommend using Monzo or Starling Bank to categorise your expenses automatically. I use Monzo to make everyday purchases and attach notes to each one. 

For example, some years ago we found that each member of my household was spending at least £40 a month on sim only plans. Therefore, we switched to giffgaff, and now pay £10 a month for the same number of minutes. As a result, each person ‘unlocked’ an extra £360+ per year. 

Secondly, we also consolidated our entertainment expenses and reduced online shopping expenses by getting an Amazon Prime subscription. As a result, we got rid of Netflix, Spotify and our tv package. 

This might seem like small steps, but trust me all the savings add up. 

Every few months I review my expenses to find areas in which to cut out or consolidate. Any savings are passed into an emergency fund (more on that later). Any savings I ‘unlock’ are then passed on to an investment account with Ratesetter. At the end of the year, I take out the money from Ratesetter and add it to my emergency fund. 

Building an emergency fund by cutting expenses.
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By conducting this budgeting technique, I have saved more than £2,000 per year.

Let’s find more ways to keep more money in your pocket. 

How to increase income 

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Extra income from home

Most people view income as static. They work for a set number of hours and get £X at the end of the month. 

Call me crazy, but I don’t believe that there is a set amount you should be making each month. 

If you have a job which leaves you incredibly tight at the end of the month, you can place yourself in a position to make more. Upskill using Shawacademy. They offer online certified diploma courses for £45 per month. This gives you unlimited access to all their courses, and you can learn whenever it suits you. You can use your new-found skills to become a more valuable employee- and therefore worthy of a raise. Alternatively, you can use qualifications to get a well-paid job elsewhere. 

You can also increase your income by taking on a part-time job, or going it alone using the side income ideas below: 

  1. Online tutoring – You can make £15+ an hour from home. Here is a list of the biggest tutoring sites in the UK. What I love about teaching online is that it fits around my lifestyle.
  2. Offering services online – Upwork is a marketplace for serving clients around the world. Here is an amazing article on how to get high-paying clients on the platform.
  3. Freelance Writing – There are millions of website owners willing to pay for well-written content. This helps business owners get more traffic. I learned the ropes on the Make A Living Writing blog.

income will help you move from the common

Debt management 

Dave Ramsey explains how to wipe out credit cards, mortgage & loan debt.

1) Your savings rate needs to exceed your debt repayment; otherwise, you will never get ahead. 

2) Pay more than the minimum repayment on your credit cards. Most credit cards have interest rates so high that paying the minimum only pays the interest. Lenders love it because this ensures that you are locked in for longer, and end up paying much more. It is like giving them free money. 

3) Use credit for essential life emergencies. Luxury shopping and holidays aren’t essentials. 

Much like your budget, it is good to know the balance left on loans or credit cards plus the interest rate. Pay more towards higher interest debt because they cost more over the long term. 

 It might be worth getting a loan with a low-interest rate in order to clear your debts and pay less over the long term. Money-Saving Expert’s eligibility calculator is a powerful tool for seeing the likelihood of approval without taking a hit to your credit report. 

Debt is one of the biggest roadblocks to financial prosperity. The sooner you can get rid of it, the better. 

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Final thoughts 

As you can see, sorting out your finances isn’t challenging. You need to want it. If you found this straightforward guide to personal finance useful, share it on social media. It helps me out a lot.