Welcome to Money Matters: GLAMOUR’s weekly dive into the world of finance. We’re chatting all things personal finance, from contracting rights in the workplace to expert mortgage advice and saving for your first home, to ISAs and dealing with debt, to help empower you to make better choices. Now more than ever, it's important to understand our money, but so many of us feel as if we don't have a handle on it – or worse, feel anxious and scared about money.
So each week, a woman in a unique situation will give us an honest breakdown of her finances, and our expert will give her easy tips on exactly how to tackle it.
To submit your own anonymous money diary and get top expert tips tailored to you, simply submit your entry here. And don’t forget to join GLAMOUR’s Facebook group, Money Matters, for more exclusive finance content.
MY ACCOUNTS
Current account: £300
Savings account: £0
MY INCOMINGS
Annual salary pre-tax: £18,000
Annual salary post-tax: £15,838
Monthly wage pre-tax: £1,500
Monthly wage post-tax: £1,320
Other incoming payments: Depends on commission.
MY OUTGOINGS
Rent/mortgage: £0
Bills: £0
Splurges: £0
Other: £200
Any student loan/credit cards/overdrafts etc: £0
MY MONEY THOUGHTS
My worst money habit: Spending money without knowing how much I have left for the month.
My biggest money worry: Having no money when I finish my cruise.
My financial hopes for the future: That I finish my cruise with some savings to ease the pressure when looking for a new job.
Current money mood: 🛥️🥳👿
Let's talk money.
WHAT MONEY EXPERT MAKALA GREEN SAYS:
Makala Green is a multi-award-winning Chartered Financial Adviser at Schroders Personal Wealth and has over 18 years of experience in the financial industry. She understands managing money can be complicated and confusing, which is why she is passionate about making financial planning more accessible for all. She is also the Author of The Money Edit; a no shame no blame guide to taking control of your money.
Get to basics with budgeting.
The key is to keep it simple. Start by looking at your average income for the last three months to give a realistic monthly income (post-tax). Next, tally your total monthly expenses. Work out what you have left after all expenses, giving you your disposable income. Your figures show that you should have some money remaining due to no major expenses such as mortgage, rent or bills. This provides a perfect opportunity to make the best use of the money you have left to build a better financial future that will make you feel more confident about your finances.
Track spending
Keeping track of your expenses will give you control over your cash. Start by breaking down your spending into categories that make sense for you. For example, living expenses, transportation, subscriptions (like Spotify or Netflix), groceries, medical, debt payments, and entertainment. It helps to identify unexpected areas where your money may go missing. Create a spending plan to get a true picture of your money going out. You’d be surprised how much you can squeeze out of your income to make room for saving. Overall, tracking your spending helps identify areas for improvement so that you can spend less on things you don’t need and put that money towards something better.
Start saving
It doesn’t matter how big or small your paycheck is. The earlier you start saving, the more money you’ll have in the future with fewer money worries. When you invest your money early, you don’t just earn interest; over time, you also earn interest on your interest, also known as compounding. The harder you make your money work, the more it will grow. The cost of living crisis in the UK has had a huge impact on the cost of our daily living, meaning prices increase while the value of your money decreases, and with your contract ending in 2023, it’s wise to set aside an emergency fund to cover unexpected expenses such as medical appointments, car problems, or even a loss of income. Ideally, you should set aside at least three to six months to give yourself financial peace of mind.
Create new spending habits
Managing money can feel like a mammoth task. That’s okay. There are tons of tools and apps available designed to make it easy to help get you sorted. Apps such as Emma, Plum, Monzo, or even a banking app (preferably where your current account is held) can be a great way to learn your spending habits. You’ll set a monthly budget and a spending goal for each category. Many apps have open data technology that links to your financial accounts to track your expenses. You’ll even get alerts when you exceed your category limit. Over time, this will help you become more confident in managing your money and keep your spending under control.
Focus on long-term goals
Your twenties are a perfect time to get your finances in order, and getting the right financial advice about your future is crucial. You can do a few things to action your long-term goal plan. Firstly get a grip on your finances through budgeting, create an emergency fund and set future goals.
Some possible goals you may consider:
- Short-term goals: saving for a holiday or an emergency fund to ensure you can financially survive if your income stops or reduces for a while.
- Medium-term goals: saving up for a car, house or major event.
- Long-term goals: saving for retirement or paying off your mortgage.
If in doubt, speak to a financial professional to help create a future financial plan.
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