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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: £1994.33
Savings account: £100
MY INCOMINGS
Annual salary pre-tax: £34,134
Annual salary post-tax: £23,809.08
Monthly wage pre-tax: £2844.5
Monthly wage post-tax: £1984.09
Other incoming payments: £0
MY OUTGOINGS
Rent/mortgage: £550
Bills: £272.31
Splurges: £300
Other: £97.16
Any student loan/credit cards/overdrafts etc: I have student loan to pay off.
MY MONEY THOUGHTS
My worst money habit: Eating out and buying coffees.
My biggest money worry: Not being able to save or have any money to treat myself with such as clothing.
My financial hopes for the future: I hope to save enough money for another deposit for a house with my boyfriend and be able to keep my current house to rent out.
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.
Eye up your expenses.
A great way to save more money doesn't always involve stopping what you enjoy but keeping a close eye on your spending. Firstly you want to have an accurate picture of where your money is going each month. Keep track of all your expenses – every coffee, takeaways, tips, and monthly bills. Record your expenses however is easiest for you – a pen and paper, a simple spreadsheet or a free online spending tracker or app. Once you have the numbers, organise them into categories, such as mortgage, utility bills, food shopping and socialising, and total each amount. Be sure to factor in expenses that occur regularly but not every month, such as car maintenance. Use your bank or credit card statements to ensure you've included everything.
Save before you spend
Once you know your monthly spending, you can easily create a budget. Your budget should show how much you spend in each area compared to your income. For example, your household bills represent 13.7% of your income and your splurges 15% (based on the figures above). A simple trick to save more and prevent overspending is to save before you spend. An easy way to do this is to include a savings category in your budget and aim to save a realistic amount that feels comfortable. Plan on gradually increasing your savings over time.
Trim your everyday expenses.
If you can't save as much as you'd like, it might be time to cut back on expenses. Identify non-essentials, such as socialising and eating out, and things you spend that you don't account for and see what you can spend less on. Look for ways to save on your fixed monthly expenses, such as your utility bills, car insurance, mobile phone and broadband plans. Other ideas for trimming everyday expenses include opting for free activities or low-cost entertainment, reviewing reoccurring expenses and opting for home-cooked meals instead of eating out. It's not about slashing huge amounts of your spending but trimming back on everyday expenses.
Set a savings goal.
One of the best ways to save money is to set a goal. Start by thinking about what you want to save for, a dream holiday in the short term or buying your second home in the long term. The important thing to remember is every dream is achievable with a plan and dedication. Estimate how much money you'll need for each goal and how long it might take you to save. Then you can work backwards to see how much you need to contribute towards your future goals each month. For example, if planning to go on holiday in one year costs £1,200. Then you need to put away £100 each month (for 12 months). Breaking down your goal into more manageable monthly milestones provides a rewarding feeling and can encourage you to save more and reinforce the habit.
Prioritise your goals
After your essential expenses, your goals are likely to have the biggest impact on how you allocate your savings. For example, if you know your car insurance is shortly up for renewal, you may automatically start preparing how to pay for the renewal cost, or likewise, if Christmas is fast approaching, you may start saving towards buying gifts. You can apply these same prioritising principles to your financial goals, both short and long-term, such as buying a second property or retiring comfortably. Remember that long-term goals and planning are just as important and should not take a back seat to shorter-term needs. Learning to prioritise your savings goals can give you more momentum to save and achieve your goals in future.
Let's talk about money.
