How to get your finances under the thumb

Posted on 19 Mar 2018 Posted in  'How To' Articles
manage your money

At a crossroad with your finances and trying to figure out the best route? We know that getting the balance of dividing your salary between savings and spending right is tricky and can be a difficult game of numbers.

Sometimes it just takes a little guidance – and time – to get on the right track. So, we’ve done the maths on how you should be spending and allocating your income, from putting 12% away in your pension pot to saving 20% for socialising.

And of course, there’s all the extra cash you can make from shopping through TopCashback.

Spend one day working out your budget

By setting yourself a realistic budget for your weekly outgoings, and sticking to it, you can control your spending. It ensures you spend your cash wisely and helps prevent impulsive splurges. Make sure you include all your regular outgoings, expected purchases or costs such as bills, groceries and any treats you’d like. Carve out money from your budget to go towards paying any debts you may have off and set-up a direct debit to pay it off at the beginning of the month, so you aren’t tempted to use the money for other things. Slowly but surely you will chip away at the burden until it is no more.

12% of your income should go into your pension pot

When thinking about how much you should be putting in your pension pot, the simple answer is as much as possible, starting as early as possible. The most you can get from your state pension is currently £119.30 a week which is just £6,203.60 a year. Consider the quality of life you’ll want in retirement and your outgoings. If you start saving 12% of your salary in your 20s you should get a decent level of retirement income. However, if you are in your 30s or 40s, you may need to pay in more.

10% should be transferred into a rainy-day savings accounts

You should never be without savings. Whether you’re saving for life milestones like a deposit for your first home or a wedding, or for short-term goals such as a car or holiday, being strict about putting away 10% of your salary each month will help you get there. No matter what you’re saving for, put as much as possible away until you feel happy you have enough for a rainy day.

You shouldn’t spend more than 30% on your rent or mortgage payments

Spending 30% of your salary on your living costs should be your aim. You need to consider what is financially feasible, especially when you add your travel and outgoings on top.

Every three months check your subscriptions to see if you’re still getting use out of them

Many of the subscriptions you have might seem necessary, but you’re not always getting your money’s worth. You might find you’re frittering away cash when your Netflix account goes unused in the summer, Spotify is used only for your daily commute or the number of products you have ordered from Amazon Prime do not justify the annual fee.

Do at least two hours of research if you’re planning to spend a big sum

Impulse buying is where most people go wrong. You tend to pay the first price you see without looking into alternatives. It’s important to spend a significant amount of time researching and comparing prices, especially if you are planning to spend a large amount of money. Put aside some time to ensure you can really think about where you can get the best prices and if what you want to purchase is really needed.

You could save, on average, £325 a year by shopping with us!

You probably already know this, but you can earn some of your money back on your spending on everything from the weekly shop, TV contracts, and financial products to new clothes and holidays. And, if you make the most of shopping with us, every time you shop, you could get back, on average, £325 each year.

Set aside 20% for socialising, clothes and luxuries

While it’s important to be savvy with your spending, you should also treat yourself. However, it’s important to keep any eye on your spending. Putting aside 20% of your salary will allow you to enjoy the things you want to without going overboard.

euphoriabuzz25 Mar 18 - 19:13A good article up until the point where it states not to be spending more than 30% On rent or mortgage payments. This is totally unrealistic for a large amount of the population. It would be great if we could all say it is achievable but realistically, this is probably not the case.