Financial confidence is not something that simply comes to you – unless, of course, it’s paired with financial naivety. In today’s Britain, getting by is more expensive than ever, as a direct function of wage stagnation against inflated costs-of-living. The pounds in your pocket have to stretch a little further; this is reason enough by itself for rising anxiety around money.
Add in the tantalising prospects of deferred payment schemes like Klarna, or PayPal’s Pay In 3, and you have the makings of a financial well that gets increasingly difficult to climb from. Luckily, you don’t need to take a course in economics to gain the financial confidence from which your future could benefit. Rather, you just need to start making some small, daily habits that build up to a savvier grasp on your income and outgoings.
Start With A Daily Check-In On Your Finances
This, necessarily, should start with a daily check-in. At some point each day, give yourself just a minute to go over the state of your bank accounts and outstanding debts – with a specific view to actively looking at your daily purchases.
Contactless payments and one-click online shopping make spending money about as passive as it could be; looking at your bank activity each day makes those purchases intentional again, and gives you an opportunity to have more agency over your spending next time you’re at the checkout – digital or otherwise. This minute could also be used to keep an eye on upcoming bills, so as not to be surprised by them.
Automate “Pay Yourself First” Savings
In keeping an eye on your finances day-to-day, you’ll have a clearer idea of how much money is slipping between the cracks on forgettable fripperies – hence, you’ll be able to switch tack to make that money do more for you. Every time you think about buying a takeaway coffee, or a straight-up takeaway, why not deposit an equivalent amount in your savings? On a monthly level, you could use each payday as an opportunity to place more in savings; just set up a direct debit to automatically pay something into a cash ISA.
Use Credit Judiciously To Reinforce Habits
If you’re wanting to develop positive financial habits, you might think that lines of credit would be your last port of call. However, credit has an important role to play in financial confidence, and indeed in the health of your outlook.
Credit reports are used as yardsticks for risk, by banks and lending institutions; poor credit scoring, even due to a lack of lending history, can negatively impact your chances of getting a mortgage. By using a responsibly managed credit building card in small, regular ways, for instance as the payment medium for your grocery shopping, can improve your credit score and open up your long-term financial opportunities.
Track Your Spending Using Simple Tools
Lastly but not leastly, you can make great use of the many (often free) financial tools available for your smartphone. Money-tracking apps, auto-cancellers for subscriptions, deals comparison tools; all of these and more are fantastic for getting to grips with your money. If you’re an app minimalist, there’s always the good old fashioned spreadsheet.
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