Top 5 Savings Tips for Financial Literacy Month
Financial Literacy Month was created in the US in 2004 to encourage the discussion and teaching of better financial literacy for all ages. It’s important to instil good habits in the young to manage their money responsibly. But it’s also important to maintain good habits as an adult as well. This month is a good time to get everything you have been planning to do, in order. Take advantage of the advice out there this month to give you a nudge in the right direction.
We have had some tough times in the UK recently, so Financial Literacy Month is coming across the pond at the perfect time. This is not a month of doom and gloom but a month where we help each other. Whether you’re saving for a new holiday or a new home.
So, let’s get started with some ways to save and protect your money and improve your financial literacy.
Start Budgeting
You’re likely familiar with the building blocks of budgeting if you already manage your money by paying utility bills, council tax and your mortgage or rent of your home. But with many bills going paperless it becomes a more automatic process and before you know it your paycheck is disappearing to goodness knows where!
Identify Your Bills
Gather together all your digital paperwork into one place, listing the provider, the payment, and the renewal date. The simplest way to do this is in a spreadsheet. If you cringed at the very word, don’t worry this doesn’t need to be layers of sheets. Others have used bullet journaling to help to make their budget tracking more fun. Approaching this more artistically can really help remove the stigma of tedium that budgeting has. But remember not to spend all your time with the washi tape.
This ensures you are always on top of who you’re paying and when. It also lets you see how much you’re spending each month.
This initial stage may seem boring and can take some time but once this is set up all you need to do is keep it updated occasionally and it will help you for years to come!
Financial Literacy Month is a great time to begin this process as there are plenty of articles around to help you to build something that can help you manage things for the future you want.
Set New Goals
Now that you can see all your outgoings and incomings clearly, it’s time to decide on your Long Term Goals. Do you want to save for a new home? A large renovation? Or maybe a luxury dream holiday!
Have something you want to aim for long term, and also build in some little wins along the way. Save for a small self-care gift like a meal out or a new watch, as long as you haven’t got your eye on a Rolex. This ensures you don’t get disheartened on your way to your major goal. You’re allowed to spend and enjoy your money; you earned it after all. But keep your eye on the prize, you’ll be so proud of yourself when you get there.
Savings
Build into your budget a small, manageable ‘bill’ to yourself. Setting up a routine of sending a set amount to your savings helps you to build good saving habits. Even better if this can be a standing order. You will soon adjust to not having that money in temptation’s reach and instead, safe in your ISA or savings account.
But remember to be kind to yourself. Begin with a small amount and raise it according to what you can afford. There is no need to rob yourself of what you need or put yourself in a difficult situation by overtightening that belt.
Before you know it, you will be well on your way to that Mid-Goal dinner out and eventually your Long Term New Home Goal.
Take Care Of Your Credit
Your credit score is now more important than ever, especially if you are looking to buy your own home.
The above tips will aid you in paying bills on time and paying off any credit you may have outstanding. This is the main key to improving a credit score. A low credit score can come from a lack of history as well as any history of unpaid bills. So, shake the stigma that a low credit score means you aren’t careful. It happens to us all. It is easy to build this back up with enough consistency.
Here are a few tips for improving your score, by Experian themselves.
- Get on the electoral roll wherever you live and maintain an updated record if you move.
- Make regular payments on time. This often means if you lack any history, it could be time to invest in a credit card, but use it responsibly.
- Keep credit utilisation low. Using less of your allowance looks better. So, if you have a £3000 credit allowance, using up to £1000 is better. Try to keep this below 30%.
- Ensure your report is correct with your current address details so that when a lender checks, it all adds up.
- Avoid moving a lot if you can help it. Lenders like stability, so, if possible, try to keep those long renting leases and cosy in your home.
- Keep hold of those long-standing credit accounts. Lenders like to see as much evidence as possible that you can look after and manage your money. A long-standing account is a good testament to that.
Do not fall for companies who claim to be able to ‘fix’ your credit score for a one-time fee, they are so often of ill repute. Credit is built best when it’s built slowly and consistently. However, there are credit builder cards with low limits and high interest that can speed this up. But use them carefully, only on everyday essentials you would always buy, and pay them off as soon as you can.
Keep an eye out this Financial Literacy Month for more tips on how to improve your financial landscape to help you save and protect your money.
Check out our other blogs for more inspiration and help on your journey to a new home. We are also on Facebook and Instagram where we post little tips and mood boards to help you along.