Everyday financial habits to improve your financial wellness

05 March, 2021Eleanor James

What can you do to improve your financial future? Ahead of International Women's Day, we're sharing our top tips on managing personal finance. 

Hand dropping coins in a piggy bankGender inequality in the workplace in the UK is still rife. The Financial Times reports that over 90% of women are working for companies that pay them less than their male colleagues.  

It’s clear that as a society we still have a long way to go, with governments, employers and individuals all having a critical part to play. 

However, everyone can get more from their money if they learn how to manage their personal finances.  

Take control of your finances 

As with so many things in life, mindset is crucial when it comes to our relationship with money.  

By facing things head on and taking a proactive approach to managing your money, you’ll feel more in control. Talk about money openly with people you trust, get organised, create good money habits and watch your money mindset flourish.  

Make a budget 

Whether you’re a spreadsheets fan, or you want to try out one of the countless apps available to help us manage our money – think Plum or Moneybox – it’s never too late to get started.  

Set aside as little as an hour a month to review your finances, identify any patterns and adjust where necessary. Make sure your budget is realistic and working for you. The 50-30-20 is a popular budgeting technique. This method denotes that:

  • 50% of your monthly salary should go towards needs – rent, bills, food
  • 30% towards wants – non-essential items – and
  • the remaining 20% should be saved. 

Invest in your future 

The statistics around the pension deficit, facing women in the UK, are scary. And whilst the solution lies in a combination of legal and policy changes, there are steps you can make to directly impact your own personal pension outcome.  

Start by making sure you’re enrolled in your workplace pension scheme

This will not only help you save for retirement, but you’ll also benefit from employer contributions and tax relief. Combined, these can more than double the funds that you set aside each month. 

Make the most of your savings

In the shorter term we all know, especially in the current climate, that we should be putting money away for a rainy day.  

But it shouldn’t stop there. You work hard for the money you’re saving, so make sure it’s working hard for you too. Shop around for saving accounts with the best interest rates.  

Think about how long you can afford to put sums of money away for too. You might earn more interest if you put funds in a fixed savings bond, as long as you don’t think you’ll need to access it for a year or two. 

Consider tax-free options

You might also look at saving into a tax-free ‘individual savings account’ (ISA) to build long-term wealth for your future.

You won’t pay tax on the interest paid on a cash ISA. Likewise, income or capital gains earned in a stocks and shares ISA are tax free. 

Don’t neglect your financial health 

Finances and wellness – the two are intrinsically linked.  

We know the importance of diet and exercise for our overall wellbeing. We should not neglect our financial health if we want to take a holistic approach to taking care of ourselves.  

Take care of your money, track where it goes, how you use it and how you want it to look in the future. Afterall, you can’t manage what you don’t measure. 

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