Do you struggle when it comes to saving money? We’re taught many different subjects in school and even though they are all important it seems as though life skills, i.e. financial planning, aren’t always included. There are many aspects of financial education including:
- How do you keep it safe
- How do you spend it
- How do you save (for now and in the future)
- The decisions that you make about saving or spending
The thought of adulthood and money can seem daunting at times, but these helpful tips can help you make sensible and informed decisions.
The importance of saving money
Having a part-time job while at school or college is a great way to earn some extra pocket money.
Starting to save money from a young age, provides a head start towards positive saving habits. There are a variety of ways you can save money, including:
- Opening a savings account – putting money aside every month will enable you to form good saving habits for the future. Opening a savings account is also a secure way to store your money.
- Setting saving goals – if you struggle with motivation then setting yourself a goal will give you something to work towards. Start small and often, to make it easier and more achievable.
- Save the change – some banks allow you to put any change from a transaction directly into your savings.
Budgeting is also an important life skill when it comes to the future, as it allows you to create a plan and help you spend your money wisely. If you don’t have enough money to do everything you want, then you can use this planning process to prioritise your spending.
As a starting point, set yourself a monthly budget as follows:
- Log your income
- Record your essential expenses (transport costs, mobile phone, food, etc.)
- Plus non-essentials (treats)
- Record ‘anything else’ you need to save for which you can’t afford in one go (birthday present/holiday)
- And then review:
- What is your monthly income minus your monthly spend
At the end of the month, ask yourself:
- How was it?
- Was it difficult to stay within your budget?
- What did you learn?
There are many apps that can help when budgeting. For example, allowing you to set a budget for a specific category i.e. food, transport, going out, etc. Also being able to turn on notification warnings if you’re spending too fast. Being able to set budgets for different categories helps you see how much you’ve set aside for each cost. This will allow you to budget more efficiently as you then know how much money you have left aside. You can also create saving pots within apps making it easier to budget and save.
Keep track of what you are spending
Keeping track of your spending allows you to stay in control of your finances.
What happens if you realise your income doesn’t cover your expenses, could you reduce your outgoings or increase your income? Whilst you can not cut down on the ‘essentials’, you could cut down on day-to-day spend by becoming a savvy shopper, reducing gym membership, meals out, etc.
If you had spare income, what could you do with this? You could save it under the ‘anything else’ category that could go towards getting some money together for a future birthday present or have money aside for an unexpected event. Alternatively, you could start saving for the longer term.
Before opening a bank account it’s important to do your research to check the benefits and drawbacks for each bank.
World Mental Health Day took place on Sunday to raise awareness of mental health issues around the world and rally efforts in support of mental health. It gives an opportunity to talk about mental health in general; how we need to look after it, how important it is to talk about things and to get help if you are struggling.
- According to a Money and Mental Health survey completed by 5,500 people. 86% of respondents who experience mental health problems said that their financial situation had made their mental health problems worse.
Fundamentally, looking after your money helps to put you in control and increase your financial wellbeing. Money management isn’t always about scrimping and saving and having to do without things that you want, but budgeting and saving help create essential habits and skills as you move into adulthood.
How can Nelsons help?
If you require any advice in relation to the subjects discussed in this article, please get in touch with Zoe or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.Contact us