When it comes to managing your money, it can feel like a bit of an uphill struggle. Rebecca Robertson is a multi-award-winning Independent Financial Adviser and Wealth Strategist for women with 21 years’ experience of working with clients to help maximise their money. Rebecca shares her top seven tips on getting in control of your money.
1)Understand your money story and how it is showing up in your spending and finances and the way that you're reacting to it. Write down all the stories and beliefs that have been passed on to you around money. What can you change to ensure you have a more positive relationship when it comes to money?
2)Have a look through your existing outgoings, and the last three months spending to assess where you’re spending most of your money. Quite often, this might be highlighted as Amazon, PayPal, or another subscription of some description. Look through your PayPal account and see what those items are and who they are for, making a note of them, so you can set a budget for that. The following month, have another look and either cancel it down or keep it.
3)If there’s something that you want and you need to save for it or it’s something you've always wanted to do, or there's something that you've always dreamed of such as a new car or a holiday you want to take your family on, set up a separate bank account. You can contact your existing bank and ask them to set up an online savings account or you can set up an online bank with one of the apps and set up a standing order from your main account to go over every month. Start small if necessary and eventually you can go up to hundreds of pounds depending on how much you need to save. Put the date that you want to have it by, and then divide the total that you need by the number of months between now and your next paycheck.
4)If you have any debts then be honest and write them all down. And if you can consolidate them into a 0% credit card, then even better. Set a time frame you want to clear them by such as three years and then divide the total debt by the number of months between now and that date. Set up a standing order or direct debit with that credit card company so you’re always reducing the balance. This also means that on your credit file that you also have a larger capacity. So, when it comes to maybe mortgages and other financing requirements, you're creating more capacity of lending which is good for your credit score. Sometimes if you have lots of credit cards and you owe small amounts on each one, it's best to clear off the small ones first because it can psychologically help you when it comes to feeling that you're getting rid of things. Alternatively, work out which card / loan has the highest interest rate, or who has the worst rate, and as such which one needs to be cleared the soonest.
5)Have a look through all your outgoings, not just your general spending, but the outgoings that you have for your bills like gas, electricity, and such like. Keep a diary, either in your work or personal calendar where you can make a note of when or how you're going to review them. So, if for example before winter comes, you want to change your gas and electric, now's the time in September / October to contact the providers and see how much credit you have on the accounts. Likewise, if you have Sky or Netflix for example ask yourself are you using them. What could you reduce in terms of insurances, and find out how much you're paying for them and what you’re paying for? It's always a good idea to review what you have and understand what you're paying for because quite often there's going to be things going out that you didn't even know about.
6)Look at what provisions need to be in place in terms of certain scenarios. What will happen if you’re sick? What if you are made redundant? If you’re with a partner, what if one of you becomes sick, what would happen to the other person? Would they be able to financially support anyone else in the family? In a worst-case scenario if one of you was to pass away, what would happen with any mortgage being repaid and would the children be looked after? It's just as important to consider what insurances you have in place for such things like sick pay cover or unemployment cover or life or critical illness cover, so you can have the right provisions in place, and if you do have savings, it means that not all your savings will be eaten up at once.
7)Contact those old pension providers and figure out what you have got in place and how much is there. There is plenty that can be done, but the first step is just going to find out what you already have. But don’t leave them in a drawer and forget about them. Do try and think about how you could maybe increase your contributions. If you're paying contributions via your work pension, then be sure to figure out the amount that you and your employer are putting in monthly. Are you going to have enough when you retire?
Finally, look at your life and what you want to achieve, where you want to go etc. Once you are past the basics in terms of savings for holidays and pensions, think about what else can be done and how else you can maximise your money and increase your wealth for the long term.
‘Ten Ways to Accelerate Your Wealth – How to Align Your Finances for an Abundant Life’ is out now on Amazon and in all good bookshops. Visit www.rebeccarobertson.co.uk for more information.