What I've learnt about managing money

I wish I knew all of this a lot sooner.


As I've been progressing through my 20s the importance of money has become all too apparent to me. I think there are certain negative connotations surrounding people's fixation with always wanting to make money but in a world where capital is so important we would be naive to somehow suggest that improving our finances is inherently a bad thing.


One of the things I am also starting to realise is how I am learning such new information but a lot of the ways to maximise your money relies on time, so it's always best to start as soon as possible. I've never been motivated by money and when you're younger it makes sense, you're not financially independent and thoughts of buying a house or saving for retirement seem like things that are in the distant future. However even from a young age I think it's vital to have some level of awareness about best financial practises and how they can benefit you. I will never forget when one of my friends at school wanted to buy shares in Tesco and I thought he was crazy but just because I had no idea what this meant and the financial implications of such a purchase.


And before you continue reading, please know I am no financial advisor. I am no expert in any of these financial hacks but I want this post to be a springboard into maybe opening your eyes to what you can possibly be doing to help you save and potentially make money. A lot of you maybe know about all of these and in which case I might be late to the party but I know also for a lot of people talking about finances seems scary and apart from having a savings account a lot of us aren't doing much more than this (that was me a few years ago). Because I am not an expert I also don't want to give you any misinformation so I won't spend long talking about each tip and will include resources whenever I can for you to learn more.


These are in no particular order.

Get a credit card

I know I just said these are in no particular order but actually I would say if you should do one thing after reading it would be this. Such a simple thing to do and can really help your future financial prospects. Credit cards seem scary because you can obviously rack up a lot of debt but if you treat it as a card that serves one function, to boost your credit score, then you wont have to worry about this. The best way you can use a credit card is to just use it as a substitute for your normal debit card. Make purchases with your credit card then pay it off straight away. This way you're not incurring any fees by using it, you are only spending money you know you have and you're building your credit score in the process. Also a lot of cards out there will give you an initial interest free period so you can use it and take slightly longer to pay it off without paying any interest.

 

Open a Lifetime ISA account

These accounts are a no brainer if you hope to buy a house one day. If you're looking to buy and you don't have one then you are seriously missing a trick. Essentially what it is, is an ISA account where the government give you a 25% boost on any contributions you make. For example, if you deposit £1000 the government will then give you £250. Amazing right. You're probably thinking it can't be that straightforward. It is... to a certain extent. There are some restrictions but all of which I think still make the account a no brainer:

  • You can only deposit up to £4000 every tax year so the maximum bonus you can get is £1000. So if you max it out you can put it into a normal savings account then when the new tax year starts put the extra money in. But when you can essentially save an extra £1000 every year regardless, I don't think this is a huge issue.

  • The funds can only be used for buying a house or retirement. If you withdraw any of the money for any other reason you will incur a penalty. But if you know you hope to buy a house one day then there's no other reason why you'd want to take the money out. And if you don't end up buying then you have a nice little nest egg for when you retire.

  • It can only be used to buy a property that costs up to £450,000. If you're reading this, I assume you don't already own a house and if you're able to buy a property that costs more than this then... congratulations. But for most of us I'd assume this shouldn't be a problem.

  • The LISA has to be open for at least 12 months before you can use it, which is why I would say do it now if you're thinking about it. You don't want to get 5 years down the line hoping to buy and you've missed out on all that free money.

Of course there's a lot more to know about LISAs but these are the key things to note if you are thinking about opening one. I recommend opening a LISA with Moneybox. If you want to know more you can read this full comprehensive guide on Money Saving's Expert

 

Get a Monzo Account

I only say Monzo because this is what I use, but any online banking app is good, other alternatives are Revolut or Starling but there are a bunch. What I love about these apps is that they give you so much more visibility and control over your money than traditional high street banks. Of course the high street banks all have their own apps these days but they are just not as user friendly as the banks that are "app first". Of course I opened my first bank account when apps didn't even exist so I have that account for the majority of my money then I use Monzo more for my day to day spending. Here are some features I love about Monzo:

  • Ability to create pots so you can easily separate your money. Good for if you're saving for something.

  • Round ups allow you to save the extra change on all of your purchases. This is great because you are saving money without even having to think about it and you barely notice it. Although you only end up saving pennies here and there, it can really rack up.

  • Visibility for your other bank accounts - This is only available for Monzo Plus and Premium customers but this is a great way to see your transactions for other bank accounts without having to open each individual account. You can just see it all in Monzo at once.

  • Sending and receiving money is a breeze specially amongst other Monzo customers. You don't even need their bank details. if you have them in your contacts Monzo is able to extract their information and you can send them money.

  • The user interface for the app is just so easy to use and fun. It's so much more visually appealing and whereas I loathe opening up my main account, opening up my Monzo account is no bother at all.

Of course Monzo has a lot more to offer, especially if you upgrade to a plus or premium account but these are just some of the reasons why I love it and I can almost guarantee of you don't have it currently, you will also love it. If you'd like to join please use the below link where we both will get £5.

https://join.monzo.com/c/x8q6390

 

Consider using Plum

Plum is a money saving app and its biggest selling point is that it has a feature where it use AI to figure out how much money you can save without you really noticing. This is the main reason why I use it! As I am quickly realising, similarly to the round up feature, the most effective saving strategies are ones where you don't have to think about it. None of us like manually transferring lump sums into our savings so what I prefer are ways you can automate lesser savings more frequently. You can also set the level of how much you want to save, so the app will either save less or more depending on your preference and it can also split them into different "pockets" within the app. You can even set the split percentage yourself! It is definitely an app worth taking a look at if you want to get more stringent with your savings!

Click here to find out more about Plum

 

Get Paypal

I have sworn by Paypal for the best part of a decade. Paypal is interesting because I have a very different relationship with it than my other accounts. And for me I don't use it as an account where I will regularly deposit money into it. It's linked to my main and Monzo account so sometimes when making online purchases it's easier to use Paypal because it means I don't have to enter my card information which is one of the reasons why I love it. But there are the two reasons why I will continue to use it 'til the end of time.

  • Interest free credit options - Sometimes Paypal will randomly give you some great interest free offers on bigger purchases. These are always changing and aren't always available but some of the ones that I have used are Pay in 3 which is exactly how it sounds. You pay off a purchase in 3 instalments and pay no interest. Similar to other services like Klarna and Clearpay. Also, 4 months interest free. Which again is pretty much how it sounds. You have 4 months to pay off a purchase in full and won't pay any interest on it. I understand not everyone loves paying in instalments but it has been a lifesaver for me and is my preferred way to pay for bigger purchases.

  • Paypal security - With most purchases you make through Paypal, your money is protected. So if you order an item that doesn't arrive or have a case where maybe you've been scammed you should be easily able to get your money back which isn't always the case when you pay with debit cards.

Most online retailers accept Paypal (but not Amazon for some reason) so it can virtually be used for 99% of your online purchases, all with the added security of knowing you have that protection for your money.

 

Consider selling used items on eBay.

eBay is a great place for your unwanted goods. It is the largest online marketplace on the whole internet. The majority of people know this but don't want the added stress of making a listing and sending something off when they can easily go to second hands good store like CEX or Cash Converter. Well the thing you need to remember is that when you're selling to these guys, you're not selling to the consumer meaning they will offer you a lot less money for your goods so they can make a profit when they then sell it on. Even after eBay takes their seller fee you are still more likely to get more money than you would if you take it in store. Of course a lot of people will take less money for the reduced hassle but if maximising your incomings is something that's important then I would always recommend selling on eBay or any other online market place like Gumtree or Facebook Marketplace.

 

Have you heard of Matched Betting?

This is only something that I have recently learnt more about. And before I get into it THIS IS NOT GAMBLING. I would never recommend gambling as a means to make money. In fact it's actually completely risk free, if you know how to do it. But essentially what it is is making use of free betting promotions from bookmakers to make a profit. And the way you do this is you make bookings with the bookmakers with the free bet but then bet against your own bet using a betting exchange. This means you are not relying on a certain outcome because no matter what way it goes you will be quids in. Sounds a bit confusing and there are obviously a lot more details.

If you want to learn more read this guide on Save the Student.

 

General money making/saving tips

I hate the term "penny pinching: because I'm really not one. I have no problem splashing out on named brands or a nice meal. However I am also not a moron and very rarely spend my money willy nilly. These are just a few more general things you can do that might help with your finances.

  • Try non branded alternatives - I know this might be in stark contrast to what I just said but I only really buy named brands when I know store brands don't quite cut it. But Aldi for example a lot of their own branded food items are often just as good and sometimes better than the branded stuff.

  • Try not to buy anything new - I have never bought a new phone. I always look on eBay for people who are maybe selling new phones for a discount or one that has been refurbished. Honestly some of the savings you can make are ridiculous. And if you don't trust private sellers a lot of high street stores have their own refurbished/used items a lot of the time. Also this practise is a lot more sustainable which is an added bonus. For clothes specifically I almost always buy from MandMDirect or TK Maxx. These are outlets that have well known brands at cheaper prices. This way I know I am getting good quality but aren't paying a premium for it.

  • Monetize a skill - This isn't always an easy thing to do. But I think a lot of people tried their hand at it during lockdown. If there is something you love doing try and figure out ways you can make money from it. For example I like taking photos, this is pretty straightforward... sometimes I take pictures for people in exchange for money. But the great thing about this is, if it's something you do already then it isn't a case of completely changing your routine or adding another thing to your plate to potentially earn more money. Plus if you love it, it won't feel like work.

  • Get a pay rise - I know of course it's not that straightforward. But this is something I would not have dreamed about doing a few years ago. But know your worth and more importantly know the market. It might be that there are people doing similar jobs to you in the same area that are earning a lot more. Of course a lot of the time pay rises have to be earned but if you've racked up a good amount of time at a company, and you know you're doing a good job, what harm can it do?

  • Or get a new job - If your new job doesn't pay enough think about looking elsewhere. The way I see it, there's always someone out there that's willing to pay more. The major hurdle is just finding these people and getting the job.

  • Flu camp - Something I've always thought about. But you can earn some serious money by taking part in a clinical trial. What has always put me off is the lengthy period of isolation you have to go through but seeing as we've all done this in one way or another it might be more appealing.

 

I am always constantly exploring new ways to save and earn more money, so if you have any ideas or there's anything else you think I should take a look at, please let me know! I have only recently started looking at stocks and shares but by no means have enough experience or knowledge about it which is why I didn't include it on this list.


Don't let finances scare you, in the past I've been very reluctant about talking about this subject with people but I think it helps to be a bit more open about both our struggles and successes when it comes to money management. A lot of us have fallen on tough times due to the pandemic and even though not all of us are in the position to be able to drastically improve our finances it never hurts to broaden your knowledge and explore ways you can be doing a little bit more to maximise your money. One day, if you haven't already, you will realise that having multiple income streams is important, even if it's only an extra £100 a month.


But whatever you do, start today! Time is also a commodity and wasting it really is like throwing money down the drain. of course we shouldn't let the pursuit of money consume us or compromise our morals. A lot of what I have said here aren't get rich quick schemes but they are easy ways to effectively take control of our money and plan for the future.


Having said all this... something that might be a little contradictory, I still believe in treating yourself when you can. What's the point in earning all this money if you can't enjoy it from time to time. Hopefully you are in the position where saving money doesn't hugely compromise your ability to have fun. Even though I do think if we are seriously saving we should somewhat feel it in our day to day life I wouldn't begrudge anyone who may want to splurge now and then. As with everything in life, it's a balance. Maybe you can even save money that is dedicated to splashing out... just an idea.


But to conclude, a lot of us can make better use of our time if we focus on becoming the rich instead of eating them.








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