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 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: £3,755.00
Savings account: £1,420.00
MY INCOMINGS
Annual salary pre-tax: £27,500.00
Annual salary post-tax: £25,000.00
Monthly wage pre-tax: £2,250.00
Monthly wage post-tax: £2,008.00
Other incoming payments: £0
MY OUTGOINGS
Rent/mortgage: £300
Bills: £60
Splurges: £100
Other: £200
Any student loans/credit cards/overdrafts: None
MY MONEY THOUGHTS
My worst money habit: Overthinking it.
My biggest money worry: It running out.
My financial hopes for the future: To run my own business and rent my own place.
Current money mood (three emojis which sum up your feelings towards money): 💆🤪🙍♀️
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.
Freelance vs flexibility
The COVID-19 pandemic has changed our perception of work, leading many people to choose freelance or flexible working options to better suit their lifestyle. Freelancing offers flexibility and freedom, such as the ability to choose your clients, working hours and rates, which can provide a better work-life balance. However, these benefits come at a cost. For example, you may not receive work benefits like sick pay or an employer's pension. Additionally, you will be responsible for managing your taxes and cash flow, which can be time-consuming and challenging, not to mention the extra expenses. It is critical to review all laws and regulations to file taxes correctly and seek assistance from a qualified accountant or bookkeeper who can double-check your paperwork before submitting it, if necessary. Alternatively, you can request more flexible working hours while benefiting from your 9-5. This way, you can plan self-care days or times with the assurance of having a secure job.
On average, working women take home £631 less than men per month.
Plan your budget a year ahead.
It is crucial to set a budget regardless of the time of the year, but it is particularly important to create a new budget or update your existing one at the beginning of the year. A clear understanding of your income and expenses is essential to plan for the upcoming months, preferably for the entire year.
Base your budget on your average monthly income and expenses and allow for any inconsistencies, such as car maintenance or unexpected travel. Following the 50/30/20 rule (50 essentials/30 non-essentials, and 20 savings/paying off debts) is a simple way to keep your spending in line and provide peace of mind. You can easily track your expenses using free budgeting apps to monitor your cash flow better and stay within budget. Also, most banks or building societies now offer online budgeting tools. If you have any work-related expenses, you may need to keep track of those separately.
Set S.M.A.R.T financial goals
When planning your financial goals, it is important to have a clear idea of where you want to head in the short, medium, and long term. This will help you gain clarity about your financial future, providing the momentum you need to achieve your goals while maintaining control of your finances. You can use the S.M.A.R.T (Specific, Measurable, Attainable, Relevant, and Timely) goal-setting framework to plan your financial goals. Your goals should be personal and realistic and have a clear timeframe, such as how much money you want to earn each month or year, what you want to achieve in the next 1-2 years, and where you want to be financially in 5 years and beyond. Keeping a journal of your goals can help you stay on track and regularly review your progress, making changes when necessary.
Let's talk money.
_L.jpg)
Build an emergency fund
In a constantly changing economy, it's crucial to have an emergency fund to prepare for unpredictable times. Your emergency fund should cover at least three to six months of living expenses. Therefore, it's recommended to save some money each month for emergencies. It doesn't matter how small the amount is; if you have any money left over at the end of the month, transfer it directly into a separate account. Alternatively, you can start with a lump sum amount and continue to set aside money regularly to keep growing your emergency fund. This will help you budget for emergencies, and you'll be surprised by how quickly even a small amount of money can add up. If you have extra money left over each month, try using the Jam-Jar Method of saving. It involves dividing your money into separate pots for different expenses, such as emergency money, leisure, and holidays. Many banks offer accounts that allow you to easily move money into different pots, and you can even have fun getting creative when labelling your jam-jars.
Money and mental health
Your mental health and financial well-being are closely linked. Financial worries can harm your mental health, and poor mental health can make it difficult to manage your finances, which can start to feel like a vicious cycle.
Understanding your money mindset patterns can help you find solutions that work for you and keep you in control of your financial and mental wellbeing. You can record a money and mood diary whenever you make a purchase or make a note of the type of moods that cause you to spend and why. It also helps to build money tasks into your daily or weekly routine, such as a monthly set day to review your budget with a morning coffee. Allocating a set amount of regular time to think about any tasks you need to do around money, for example, paying bills, can help reduce financial pressures. You could plan a reward to recognise your improvements. Remember, you are not alone; if you are struggling financially or mentally, help is available.
Let's talk about money.
