How to deal with your finances!
No matter who you are, we have some sort of financial situation. You can be 16, have your first job and really want to save up for something or 28 in your career and still trying to balance some finances. this topic is an important topic to me because since working from when I was able to grab a first job, I have always been cautious of my money. I know that money doesn’t create happiness but to be truthful, in order for you to get some things that you want or need, the basis of it is money and it’s not wrong to acknowledge that.
A little rant
I’m a true believer in not judging young people for having financial struggles even when they don’t pay rent or the ‘adult’ finances (whatever qualifies for that) because at the end of the day, you don’t know how much hard work or thought anyone puts into their earnings, as well as where their money is going. The reason I talk about this is because I remember being young and telling people ‘I have no money so I can’t go out’ and people would be perplexed as to where the fuck my money was as if I can grab it from the money tree. 'Ask your parents for it' or 'what kind of bills are you paying?!'
This peed me off and even though deep down I could've asked my parents for money, I wanted to stick by my main goal - to stop asking my parents for money for things out of my own pleasure. There's nothing wrong with asking parents for money at all, and I still had to every now and then but as I moved from job to job trying to aim for a higher wage, reaching that goal was closer.
I feel like sometimes we might be peer pressured into putting our money where we don't want to, just so we can fit in or be a bit more 'interesting'. No matter who you are, stick by your goal as much as you can and be headstrong when it comes to spending what you worked for.
Know your expenses
First things first! Where is your money going? This is probably the worst part of when I have to deal with money.
Write a list of every single outgoing (Direct debits): Phone bill, Gym, Netflix, Car expenses, rent etc. Write the date and the amount and then total it up. Try not to cry. It's really important to be aware of the total amount of your outgoings, even though it's daunting to look at, the more you're aware the more you're careful. The date will relate to when you get your wages. If you get your wages on the 1st but a bill is on the 28th, then you need to make sure there's enough money in your bank for that date.
I used to do this each month but still went overboard with money. However I didn't stop laying out my expenses each month because it made me deal with money better overtime. I definitely became more vigilant of my expenses, and now I know how much I can spend freely without worrying if I have any left for my bills.
The best next step is to set some goals. Having financial goals will motivate you to work hard, grab those overtimes at work and put that money away.
It's good to have goals for where you want to put your money. Maybe your first flat, your first car, your first big holiday or backpacking, whatever motivates you.
Even if it means having to miss out on some things with friends or sacrificing some free time, it will definitely be worth it because you'll be so thankful you achieved it all by yourself.
Open a savings account!
My biggest advice to anyone would be to open a savings account. I opened my first savings account when I started to work. Even if you don't have a job but do small jobs, such as babysitting, it would still be handy to have a savings account.
It doesn't matter if it's 50 pounds or 5 pounds, savings is savings and it'll keep you in the habit of putting some money away.
I usually say to put 10 percent of your earnings away as a starting point but you can put more/less if you want to! The savings account can be for whatever you wish it to be. When I was young I said my savings account was for my future lol as if, I just kept on grabbing money from it when I ran out. Before uni I said it was for a house yeah I laughed at that too.
After trial and error, my personal experience led me to having the savings account for big expenses for now. E.g travel, equipment maybe a camera?, sometimes emergency money if my income was low that month. As big expenses are things that don't happen often, it has helped me to build up my savings account. Even if I don't need anything right now, I know that it's there for when I do need it.
Find cheaper alternatives
When you line up your expenses go through each one and see if maybe there's a cheaper alternative for it. This also depends on the kind of sacrifices you want to make. For example, if you're due for a new contract, but your phone is still in great condition and phone bills can be huuuge, you can opt for a SIM-ONLY contract (you know the one you get when you're young and get the hand-me-down phones). We all love a new phone, but if you really want to cut a big expense this is definitely one that would help.
STUDENT DISCOUNTS! There are more student discounts for everything nowadays, studentbeans, UNIdays and NUScards can literally get you discounts in everything you need. And if you're not a student, find someone who is a family member anyone, my family come at me for student discounts all the time and theres no limit to using them so why not help them out!
A big dilemma is wanting something you don't need. Deciding whether to get a new jacket knowing full well I don't need a new jacket anytime soon (me lol).
Just question yourself every so often when you feel like splurging out, if you really need to spend this much. If you really want to save up money for a holiday, and you haven't been doing so well but buying item you don't need, then you just need to ask yourself 'do I need this?'
Sometimes we think we need something, but really we already have one of that something at home and we just want more. If you're a bit on the broke side then sometimes sacrificing a 'want' item for now will definitely help you in the long-term.
Leave money for yourself
Always put some aside for yourself. We still need to enjoy what we've worked hard for, so set some money aside for things such as clothes, makeup or a nice lunch date. Be reasonable with this though and don't be so generous where you spend 100 pounds on clothes every month - when instead 50 could've been contributed to your savings.
Put your phone to good use
There are lots of apps that I've tried over the years to help me keep on track with my finances. Any of them does the job, it just depends on how you like the look of the app.
I also keep a list of my expenses on my phone all the time just so I know what is always coming out. So on my pages (iphone) or if you use evernote (highly recommended!) create a heading saying expenses and put a list of them there. If you ever feel a bit worried that you're low on money, which I do randomly when i'm out somewhere, you can quickly just have a look at what's to come out and if you have money for it.
They're the most handiest things ever - a calendar. I put everything in my calendar, if I need to visit the doctors, all of my lectures, what work needs to be done on what days I can and definitely when expenses come out.
The key to having reassurance with your money is :
1. Never be afraid to look at your bank account.
2. Be aware of your money. It can really help avoid getting yourself into sticky situations and reduce constant money worries.
I hope these have helped made looking at your bank account a little less stressful.
Until next time,