London Institute of Banking & Finance

Everyday financial habits to improve your financial wellness

To mark International Women’s Day 2021, we’re sharing some practical, everyday habits that can be built into daily routines to improve financial wellness – to help you get the most out of your money.

Gender inequality in the workplace in the UK is still rife. The Financial Times reports that over 90% of women are working for companies that pay them less than their male colleagues.

It’s clear that as a society we still have a long way to go, with governments, employers and individuals all having a critical part to play.

However, everyone can get more from their money if they learn how to manage their personal finances.

Take control of your finances

As with so many things in life, mindset is crucial when it comes to our relationship with money.

By facing things head on and taking a proactive approach to managing your money, you’ll feel more in control. Talk about money openly with people you trust, get organised, create good money habits and watch your money mindset flourish.

Make a budget

Whether you’re a spreadsheets fan, or you want to try out one of the countless apps available to help us manage our money – think Plum or Moneybox – it’s never too late to get started.

Set aside as little as an hour a month to review your finances, identify any patterns and adjust where necessary. Make sure your budget is realistic and working for you. The 50-30-20 is a popular budgeting technique. This method denotes that:

• 50% of your monthly salary should go towards needs – rent, bills, food
• 30% towards wants – non-essential items – and
• the remaining 20% should be saved.

Invest in your future

The statistics around the pension deficit, facing women in the UK, are scary. And whilst the solution lies in a combination of legal and policy changes, there are steps you can make to directly impact your own personal pension outcome.

Start by making sure you’re enrolled in your workplace pension scheme

This will not only help you save for retirement, but you’ll also benefit from employer contributions and tax relief. Combined, these can more than double the funds that you set aside each month.

Make the most of your savings

In the shorter term we all know, especially in the current climate, that we should be putting money away for a rainy day.

But it shouldn’t stop there. You work hard for the money you’re saving, so make sure it’s working hard for you too. Shop around for saving accounts with the best interest rates.

Think about how long you can afford to put sums of money away for too. You might earn more interest if you put funds in a fixed savings bond, as long as you don’t think you’ll need to access it for a year or two.

Consider tax-free options

You might also look at saving into a tax-free ‘individual savings account’ (ISA) to build long-term wealth for your future.

You won’t pay tax on the interest paid on a cash ISA. Likewise, income or capital gains earned in a stocks and shares ISA are tax free.

Don’t neglect your financial health

Finances and wellness – the two are intrinsically linked.

We know the importance of diet and exercise for our overall wellbeing. We should not neglect our financial health if we want to take a holistic approach to taking care of ourselves.

Take care of your money, track where it goes, how you use it and how you want it to look in the future. Afterall, you can’t manage what you don’t measure.

Financial skills for LiFE

Are you a teacher who would like to incorporate financial education in your lessons, but don’t have the teaching time? Perhaps you’ve found the above tips useful and you want your students to learn more about how to manage their personal finances well – to future proof them for whatever the future holds. We can help!

Lessons in Financial Education (LiFE) is an online, affordable study programme using animation, games and music to make learning about finance fun and accessible. No teaching time is required. Students can do the programme themselves and it can lead to a GCSE equivalent (although it doesn’t have to).

LiFE has helped hundreds of thousands of students around the UK become financially confident – and it could help yours too.

Together, we can deliver the impactful financial education that our young people deserve, to set them up for whatever the future holds.