Financial Wellbeing: Budgeting

Financial Wellbeing is the often the forgotten element of a workplace wellbeing strategy. However, neglecting to adequately address the challenges of maintaining good financial health can be a trigger for increased stress and anxiety for employees. Over the next few days, we’ll talk about using the stock market when saving, investing in pensions, and making sure we keep our tax to a minimum. So, how do we make sure we have some money to spend?

We all know we should do it, we all know how (in theory) we should do it. But how many of us really do stick to a budget? Here are some tips and tricks you can find useful.

Firstly, why do it?

Set yourself a goal – get out of debt, buy a new car, a holiday, or home improvements. Whatever the reason, it always helps to know why you’re doing it so set yourself a goal.

My goal is to save enough for a deposit for a new home. Perhaps this one?

I can dream! This might be more realistic.

Secondly, how much do you really spend?

This is a bit like dieting and making a food diary and it can be just as scary! That branded coffee each morning only costs £2.80 – small change, but that could amount to around £56 a month or nearly £670 a year – and that’s just one coffee. Think about all the other incidentals you spend your money on, breakfast on the way to work, lunch out, magazines, newspapers – it soon mounts up.

Then add the known regular expenses, household bills, rent/mortgage, food, petrol, and the less regular expenses such as an MOT, insurances or birthdays, and Christmas.

Then there are those little surprises, a blown exhaust, a spontaneous meal out or the washing machine conking out.

It’s a miracle that any of us manage when there is so much to juggle.

To work out how to get through the month, it’s a good idea to have a budget planner, you can use one of the online budget planners if you don’t have something already set up. There’s one from the Money Advice Service that offers both a quick option and a more in-depth option – really useful if you want to try it out.

My tip on this is to be really honest with yourself and then build in some cash for that branded coffee if it’s really important to you. 

What’s next?

So, you have a goal, you know what you spend – how can we move to the next level and actually spend less? We all know about these standard tips:

  • Change your mortgage lender
  • Review your insurances
  • Review your utility suppliers

So don’t just think about it, do it!

These 5 ideas are not so obvious, but the first one ties in nicely with our physical wellbeing week:

1. Buy a season ticket that is train only and does not include the tube, walk instead of getting the bus or cycle to work. I’ve changed my season ticket: it’s saving me about £60 a month and makes me walk.

2. If your employer offers shopping discounts, use them. Even a small saving of 4% on your weekly shop could amount to hundreds of pounds over the course of a year and that’s Christmas dinner taken care of.

3. Have a clear out and sell your stuff online. It’s very therapeutic getting rid of stuff that’s been languishing in the loft for the last 10 years. Just sell it and put the cash towards your goal.

4. Have a rule before you pass over your credit card – ask yourself these three questions:

  • Do I need it?
  • Do I really want it?
  • Can I afford it?

I’ve walked away from several purchases recently asking myself these questions and only buying it if the answer is yes to all three.

5. Monitor your progress – it’s something we tell our clients to do when they set themselves goals, it’s something we tell our staff to do when setting professional goals at work, so do the same with your finances. Work out how much you’ve saved yourself over the course of the year by buying a nice jar of coffee and making it when you get into the office instead of buying one on your way in and have benchmarks – note it down and put it into your savings. Perhaps you could put that extra £56 each month into your pension.

Just in case you’re interested, the savings made in three of the ideas above (no morning coffee, walk instead of tube and a 4% saving on my weekly shop) could add up to around £1,632 over the course of a year. Grossed up, this would be £2,040 for a basic rate taxpayer (or £2,720 for a higher rate taxpayer) in your pension each year.

Goal achieved!

Comments

Your email address will not be published. Required fields are marked *