5 Simple Steps To Take Control Of Your Money

After the sell-out success of my female finance event series I wanted to team up with a qualified financial advisory team to provide solid advice and practical content for you guys related to the subject of money. This is the first article in an ongoing series, so stay tuned for more in the future; but for now… lets start with the basics. Let me hand over to Rob Caplan from First Wealth.

Here are five ways you can start taking more control of your money – and your future life – today. 

1. List what matters most to you

Let’s start right there. Take some quiet time out on your own and start listing the things you want to have, do or become for yourself or your loved ones in the future. Make sure you think about your long-term future too, not just this year or next. Now, highlight the things on your list which you know will require a reasonable pot of money.

Examples might include:

  1. A deposit on a first home,
  2. Education
  3. Starting your own business
  4. Escaping from work altogether  

You get the picture. And, if you need help with ideas, try out our Life Goals planning tool here.

Just by starting this list you’ll start wanting to take more control of your money and gain motivation to do so.

2. Know where you are today 

Listing some of your biggest financial life goals (the stuff that matters most to you for the long term) can be fun. But the real buzz comes when you start making plans to reach your goals, and the next step towards that is to work out where you are now. In simple terms it means: knowing what money you’ve got coming in; how much is regularly going out and so, how much you ‘could’ safely commit to saving towards your goals. It’s also about knowing what assets you have because they’ll help you achieve your goals too. This exercise is also about knowing how much money you owe (on your mortgage, credit cards, store cards or personal loans etc.) and what personal insurances you have, to cover unexpected disasters to your health or life.  The fact is, knowing your financial situation now, and thinking about how it could change in the future, is essential if you want to make a solid financial life plan.

As with your life goals, just by listing this information you’ll immediately feel more control over your money. It doesn’t matter if your finances are not in the shape you’d like them to be. For most people, they’re not – so you’re no different there. The key thing is to get a clearer idea of your finances today – because that will remove the stress of uncertainty and give you a base from which to make your future plans. You can obtain a form to record your financial details from the Money Advice Service, here

3. Build an emergency fund

Before you consider any type of investment, you’ll need to have built up a safe and accessible fund of money to cover emergencies. You’ll also need to have paid down any expensive debts you have because no investment can reliably deliver higher returns than the interest you’ll pay on those debts. You’ll have a lot more control around money when you have the funds you need to pay for those, unexpected repairs to your car or the boiler, for example. No one likes paying high-interest charges to lenders or credit card providers – especially on top of the stress of the expensive emergency. For now, just start building those funds, if you can. 

And, if you can’t, because you’re struggling with bills or repayments on existing loans, please contact ‘Step Change’ or the ‘National Debt line’ for help. These professionally run charities can help you make a plan, for getting out of debt, tailored to your personal circumstance. 

Step Change 

National Debt Helpline

4. Do more ‘free’ stuff that makes you happy

Next up, while you develop your longer-term goals (and build an emergency fund, if you need to) it makes sense to look at where your money is going from day to day.  You’ll start on this with the ‘know where you are’ exercise mentioned above, but this is about looking more closely at where your money goes.

Whether it’s for you or your loved ones, try to work out how much of your money in a typical year is going towards your basics of daily living, like food, housing and essential bills.  Then how much is getting saved towards your future financial life goals and how much goes on having fun, like holidays and evenings out, today. The balance surprises most people. 

Armed with that information you might want to list those activities that currently cost you money and which you could cut back on, or cut out altogether. Review anything which when you add it up over a year costs you a lot of money, but adds very little to your life. Then, make another list – yes, we like lists at First Wealth  – of the activities that make you happy which you could do more often, for little or no cost. You’ll want to know where to find these lists when you need fun ideas that don’t involve spending much, if any, money.

Here’s an example list for those living in London

5. Commit to learning more about money

Finally I want to encourage you to commit to learning more about planning your money. Just by following the guidance in this blog you’ll have started taking more control of your money for the short term. Financial planning and wealth building, like health building, is a long term game. And to win at it you need to stick at it for the long haul.

Ideas around that and much much more are available on our website, via our newsletters and will also be discussed at all of our Lets Talk About Money Live produced in collaboration with Zanna. So we really do hope you’ll stick with us on this journey to try and provide greater financial education. You really don’t have anything to lose – but you could gain a great deal.