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: £500
Savings account: £1300
MY INCOMINGS
Annual salary pre-tax: £56,700
Annual salary post-tax: £37,200
Monthly wage pre-tax: £4,400
Monthly wage post-tax: £3,100
Other incoming payments: £6,500
MY OUTGOINGS
Rent/mortgage: £1,400
Bills: £150
Splurges: £3000
Other: £0
Any student loan/credit cards/overdrafts etc: Credit card debt of £1000.
MY MONEY THOUGHTS
My worst money habit: No matter how hard I budget I never seem to clear the credit card and when I do, an unexpected expense happens and I have to use my savings to pay it off.
My biggest money worry: Not having savings for my future and for my sons and not having an emergency fund to fall back on should the worst happen. I have joint savings with my partner that pays for holidays and work on the house and we overpay on the mortgage, but I have nothing that’s mine.
My financial hopes for the future: I want to feel financially free, with all the struggles I have had in my past I want to feel free of the stress and worry money brings.
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 your budget right
A budget provides a great way to manage your money and is key to paying off debt, but only if it works. There are many potential reasons for a budget breakdown. The main one is the numbers don't match up; you may be budgeting ideally instead of realistically or simply spending more than you budgeted for. If so, your budget may need a little working on. Start by setting new goals which realistically reflect your expenses. Try using a spending tracker app to keep you in line with your goal. Lastly, stick to the budget; don't just write it down and forget about it. Refer to your budget regularly and compare your spending to what you've budgeted to see how you're doing. Easier said than done (I know!), but the more you do, the better it will get.
Avoid recycling debt
No one tries to get into debt. It's one of those things that happens without you noticing, or you may feel it's out of your control. However, staying out of debt is possible. One golden rule is If you can't afford it without a credit card, don't buy it (harsh but true). One of the biggest dangers of having a credit card is living under the illusion that you can afford things you actually can't. Instead, create an account or savings pot and add money each month to cover splurges and enjoyable expenses. If the money runs out, you must wait until payday to use it again. It may not sound fun, but it's a great way to discipline yourself to manage your money more effectively and avoid going into debt, meaning ditching the debt instead of recycling it. Challenger banks such as Monzo and Zopa offer savings pots where you can easily allocate different pots under one account.
Plan for your child's future.
As a parent, you want the best for your child, and financial planning for your child's future will give your son a good head start in life. You might not be able to save much money in light of the cost of living, but a habit of disciplined savings will hold you and your loved ones in good stead for the future. You can explore a Junior ISA that will remain until your child is 18. Speak with a financial adviser to work out a plan that aligns with your future goals for you and the family.
Invest in yourself
Too often, life gets the best of us, and we forget to invest in ourselves. Investing time and energy in yourself can make you feel more fulfilled and set you on the path to financial freedom. In financial terms, 'pay yourself first' could mean many things, such as setting up an emergency fund, ideally around 3-6 months' worth of expenses to cover emergencies and prevent you from dipping into your savings unexpectedly or taking on unwanted debt. Starting or contributing towards your retirement, the earlier you start, the better. Creating a debt repayment plan as debt can be the enemy of financial freedom and can affect your overall well-being. Likewise, it could be as simple as building a more positive money mindset; shifting your thoughts and feelings can change your spending habits and keep you more focused on your future goals. Don't forget to treat yourself; you work hard for your money, so it's okay to cut yourself some slack now and again; just keep it under control.
Create a financial plan
For many of us, "financial planning" may have some stressful ties. However, once your fixed expenses like mortgage and utility bills are accounted for, you can build a financial plan that meets your unique wants, needs, and future goals. What matters most is taking the initiative, sitting in front of your computer or notebook, and making your plan. It may feel daunting planning long-term, but your future self will thank you. A financial planner can help you build a solid strategy to build financial freedom, including a financial plan for your son's future and to ensure you are adequately protected in unforeseen times.
Let's talk about money.
