1. Create a bad-ass budget 

There is a reason the B-word is always the first word in personal money management. That’s because without a budget you won’t know where all your money goes, you’ll just wonder where it went.  

A budget is really just a way to set goals and track your spending. Knowing how much comes in and how much goes out is the foundation of a budget. Being able to see whether you are in surplus (more coming in than going out — the way to creating savings and wealth) or in deficit (more going out than coming in — the path to debt) you can make the necessary changes to live your best life.

Then you track what you’re actually spending. And just like that — you’re on the path to becoming a budgeting pro, may the force be with you. 

2. Avoid bad debt

Spending less than you make is how you build wealth, spending more than you have is how you get into debt and too much debt leads to a cycle of debt!

Debt, also called credit, is the obligation to pay money under an agreement. Borrowing can go one of two ways. You can borrow when you only repay the capital – or you can borrow where you also have to pay capital as well as an interest charge.

The reality is that people are spending a lot of money buying stuff and frequently they cannot afford it. And then they pay interest on it. Which makes everything more expensive. That’s how you end up in debt and being in debt makes it difficult to get rich.

Stop giving banks and other financial institutions permission to take your money. Always review your debt/credit agreements, avoid unnecessary purchases and always try 0% interest offers. 

3. Live below your means

Like most things in life — money is about balance. If you live beyond your means, living what we call a champagne life, then you are spending more than you have coming in. That means you’ll need debt to square your budget away. 

But if you live too frugally, and deprive yourself too much, you’ll eventually overindulge to make up for it. This kind of lifestyle can also lead to ill health, mental health challenges and social isolation as people reduce their spending in unhealthy ways.

The trick is to find balance and a lifestyle that’s sustainable whereby you spend less than is coming in. 

4. Treat yourself as an asset

If your budget isn’t balanced you need to cut or grow — spend less or earn more. There is a floor to how much you can cut, but there is no ceiling to how much you can earn. 

If you want to spend more, you need to have more, and to have more you need to be bringing more money in. You need to treat yourself as an asset. An asset can appreciate (or depreciate, but don’t do that!) in value.

So how can you increase your value? By thinking of how you can improve your “worth”. It is, of course, important to stress that we aren’t talking about your worth as a human being — that is a culmination of all your components, we are just speaking of the financials. You can become “worth” more when you develop a new skill, leverage your strengths, become more knowledgeable, get more experience. Become the most valuable asset you can.

5. Pay yourself first

The taxman takes your money before you get it — and yet you wait to save “what’s left” at the end of the month. You know there is rarely anything left so why not be as good to your money as the taxman is!

To pay yourself first means to set aside a chunk of your income to save or invest before you pay anything else. This should be budgeted for, if saving means you can’t pay your rent then it is clear this is not a strategy you should follow but often it is worth cutting a few luxury spends in order to get some financial security.

It’s why we recommend you set up an automatic transfer for your savings for the same day as your salary comes in. That way you save before you ever had the money — you’ll be amazed how quickly you don’t notice that money!

Remember too that extra money — whether a bonus or pay rise — shouldn’t be used to inflate your lifestyle. Treat yourself with 20% and put the rest into saving or investing.

6. Don’t live on the edge — Have an emergency fund

One thing which became very clear during the corona-crisis is just how close people live to the edge. Getting an emergency fund together, a stash of cash you can access if you need it is crucial. Because emergencies happen out of the blue, and regularly and if you don’t have some money to back up the problem you’ll just be adding interest to injury!

You should aim to save the equivalent of three months of living expenses (but the exact amount depends on you and your circumstances) into a safe and accessible bank account so you can cover the financial surprises life throws your way. That could mean losing a job or breaking a laptop. Having this money will help keep your stress level down and keeps some money "out of sight, out of mind".

7. Have a goal

Once you have an emergency fund you can start thinking about what you want your money to do for you. It’s a lot like fitness — often people set a specific goal; to be healthier, lose some weight so that they feel they are working towards something tangible. They set deadlines, milestones, create a plan and maybe follow the relevant insta accounts. 

And yet when it comes to money people wing it!

Having a goal means you will feel less overwhelmed because you are focused on an objective and will also inspire you to success. If you have a plan and you’re working toward it then you may stumble but it won’t throw you off your game. Milestones will also “force” you into regularly examining your situation in order to track your financial wellbeing. So go on — make a plan and find some inspiring figures on insta!

8. If you need a credit card to afford it, you can’t afford it

Credit cards are key to maintaining a good credit score (for reasons passing understanding) but if you’re not sure you can use plastic without digging yourself into debt, stick with a debit card, or good old fashioned cash, where it’s not possible to spend more than you have.

When you have the cash in your hands, or you buy with a debit card you buy the item. It belongs to you — but when you put something on a credit card the interest means you could end up paying for it many times over! 

If you want something so badly that you are willing to put it on a 20% credit card then you need to really think about whether it’s worth buying at all!

9. Avoid impulse shopping

Technology is a fabulous thing but the “frictionless” that financial services are so keen to promote is actually a real problem for financial management. Buy now pay later, two-click shopping and lay-bys are great for the seller because they ensure that your brain can’t catch up to your impulse and as such you will likely spend money that, had you stopped to think, you might not have made.

Disconnecting “one-click shopping” gives your brain a moment to consider whether the purchase is a good idea.

10. Don't focus just on the price tag — think about the value 

A cheap t-shirt that costs practically nothing but falls apart in the first wash is not as good value as a pair of sneakers that cost more but that you will wear every week for the next three years.

This is called the average cost per wear and it's good for the pocket but also for the planet.

Every year, in the UK alone 350,000 tonnes of wearable clothes go to landfill — that's 7.5x times the size of the Titanic — so considering higher quality items is better not just for your pocket but for the planet.