So around September 2018, I literally became fed-up with the way I was handling my finances. Here I was 31 years old, and still struggling with the concept of saving and being responsible and having a goal to make the biggest purchase I will ever make in 2019 but the behaviour that says otherwsie. My credit cards were my best friends to the point where when I lost my credit card one month my provider said they would send it express next day delivery because I use it so much! (Embarassing LOL)
I seemed to spend all my salary and dividends from my business paying towards my credit card balances and then using them again and being in a vicious never ending cycle. My savings were decent but could be way better.
So from September 2018 I decided to sort myself out and have been on a mission to sort my finances which has gone well, and this is the mood for 2019 and beyond!
I have a credit score of 999 (perfect) which to be honest I have always had an excellent credit rating and have today (31st December 2018) cleared the total balance of one of my credit cards (this will go in my drawer for emergencies only). The other credit card is about to be cleared in a few months too. I am now focusing on my savings and when I have had emergencies such as my root canal, two major fillings and car repairs I have dipped into my savings rather than using my credit card. It also has meant that I really think and feel the value and significance of the expenses.
According to a recent report from the office of national statistics
“Today’s young adults own less property, are less likely to have any savings and are less resilient than twenty-somethings a decade ago.
Home ownership among 22- to 29-year-olds has plummeted by 10 percentage points since 2008 to only 27 per cent.
They’re also less likely to have money set aside. In just four years, between 2010 and 2014, the number of twenty-somethings with any savings at all dropped from 59 per cent to 47 per cent”
Now these figures are glommy and as a older millennial this ish is real as F! However, I think we should aim in 2019 to not let this define us and make sure that in 2019 we SECURE the bag! Here are my tips on what has worked for me and what I will continue to do.
*Disclaimer, I am not a financial adviser, any advice given below is simply what has worked for me which I would like to share for encouragement and if you chose to adopt or follow yourself then please acknowledge this is NOT Girls Talk London or me providing direct financial advice to anyone reading this article. We advise before making any changes, steps or taking out financial products to consult a financial adviser or qualified professional first*
Check and fix up your credit rating
Now if you are thinking of getting a mortgage or loan it is important for you to even qualify for one to make sure your credit rating is as high as can be ideally excellent. So I would advise checking your credit rating at least once every six months to know what it looks like and how much work you need to do. I use Experian who usually have one month free trial offers here
If your credit rating is low then a great way to sort this out that has worked for me is to clear credit card debt first and if you have multiple cards the advice I have been given is to clear the card with the highest interest rate and NOT the one with the biggest balance. Also close bank accounts you dont use. Pay creditors on time as late payments are just doo-doo for your rating. If you have an extremely low credit score because you have not shown your borrowing behaviour then I would look at taking out a 0% interest free credit card which you pay off in full every month to build up your score. Please remember though before taking out any financial products to seek professional advice first!
It is important to start to build up a reserve of savings in an account that is totally seperate from your main bank account. You can use this for saving towards a mortgage deposit, holiday or a big purchase. I know especially for us millennials we have it so tough-lower wages and higher costs such as travel and rent-so it is hard. Various publications and advisers recommend saving between 20-30% of your salary but I slightly disagree. I think you need to save what works and is manageable for you and work on increasing this percentage every year. There is not point attempting to start to save 30% of your salary if it’s going to put you in debt using your credit card when you get skint at the end of the month. It doesn’t matter if its 5% of your salary, 10%, 20%, 30% or 40%-what matters is that you start!
Start an emergency fund
If saving a percentage of your salary is a bit of a stretch…One of my great friends, Remi Ray, has started an emergency fund accountability group on Instagram which is encouraging and supporting people to save £1000 in 12 months for only emergencies by putting around £83 into your savings account per month. (I must warn you she don’t play and is serious about this group) If you want to join, shout Remi here
Set a budget and stick to it!
Sit down on a spreadsheet, word document or even in a journal and work out all your monthly expenses such as bills, loans, credit card payments, travel, food etc. After this and of course after your savings, set aside a strict budget for other expenses which can be more luxury or social. These are the ones in my opinion that can cause us alot of trouble! If you are like me, you may need to set this money aside in a seperate account and I use an app and bank account called MONZO which is fantastic. MONZO not only allows you to transfer money from your current account to their account for you in your name, you get your own debit card, can transfer money to friends, the app also allows you to see each time you spend money where it goes such as shopping and the actual shops aswell. Plus it gives you the amount of money you have spent each day which you can cap and tweak so you dont overspend. I find my MONZO card has really helped me stick to my budget but also visibly see where my most biggest expenses are. There are also other banks which have fantastic apps similar to MONZO such as Starling Bank. However, remember, do your research first and seek advice from a professional!
Put that credit card away chile!
This is very simple. Credit Cards should only be used for emergencies. Real life actual urgent emergencies such as if you need to buy a plane ticket because a family member is ill or has died in another country or you are really and truly stuck. Emergencies your credit card should not be used for are the impromptu Selfridges or Zara sale, a date, a night out or the new iPhone release et etc you get the point. Put your credit cards in your drawer at home so you don’t get tempted to splurge whilst you are out.
Make a list
Every month I make a list of the beauty or fashion items I NEED to purchase that month and also a list of outings such as dinners, shows or events so I can track if I actually can afford to go based on my budget. This has helped me especially when shopping for beauty products to not get out of control and I always think can I get this cheaper. For example, today I need to get a new eyebrow pencil and I really want the Benefit Brow Pencil but this is around £17 where as the Sleek version is £8. This is a £9 saving and I dont need the benefit brow pencil, I just need AN eyebrow pencil. Also with skincare I tend to mix between high end drug store brands such as La-Roche Posay and expensive brands such as Clarins. I have really bad acne so I cant scrimp on skincare but I find a mix between the two works for my bank account.
The easiest way I have been able to cut back on spending is really making a big effort to do as many low cost or free activities. I am not taking a holiday abroad in 2019 until I make my big purchase. That doesn’t mean I cant have a break but it needs to be a staycation. I also think carefully about meeting friends for brunch, instead can they come over and I cook? OR I say no. I cancelled my gym membership and now run for free, even did a half marathon aswell in October 2018! I regularly look out for deals, free events and free things to do especially when it is cold outside- now its the perfect excuse!
I want all our GTL family to get their finances in order for 2019 because for me this is true empowerment. So do comment or message me and let me know if any of these tips have helped you or if you have more to share.
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