February 13, 2017
Personal financial advice sounds like something we have to buy, because no one knows what it actually means, so we pay saavy banking/finance types to help us.
Actually it boils down to a simple golden rule “earn more, spend less and compound your savings and investments (if you have any)”. The great thing is you can do a lot of it yourself, without paying someone else for help.
When do I need financial advice?
You can start as early as you want, but getting financially sorted ASAP has really great knock on effects – so you could start right now.
The first place to look at are your overdrafts, loans and credit card balances. If you have to pay back money you have borrowed, you can’t save or invest it. Your money is going straight to your creditors at a ridiculous rate, because money ain’t cheap!
Start with small amounts of money
It’s easy to trivialise daily spending, after all “it’s just a coffee”. But that £2.50 for your daily flat white, could be worth over £250K if you invested it everyday of your working life!
So start thinking of your small daily financial decisions, we make dozens of them everyday, as what they could be worth to you in the future.
Great ways to invest in yourself
The greatest return you will get from any investment will be yourself – not in a motivational Monday Google images way – it’s just a fact.
Look at your career, have you been given a salary rise or bonus lately? If not, it might be because you don’t have the skills necessary to keep moving up. Find a relevant course where you can develop your marketable skills.
Don’t let the expense of furthering yourself stop you either, for every £1 spent on university education you should earn £10 over your career – so it makes sense to invest in yourself.
An easy way to find out if you are due a pay rise, is review your specific industry job market and find out how much roles similar to yours are being paid.
Now you have some research to back yourself, if would like your work to pay for your course or if you pitch a bonus to your boss.
Budget to save money
There is only one way to start saving – it’s the 50/30/20 method.
- 50% of your salary goes to rent, bills and groceries. The essential stuff.
- 30% on everything else that’s not essential like entertainment and hobbies.
- 20% is what you should be putting into a good savings account, so you get some money back from your savings.
This is the beginning of an emergency fund or deposit for a home. If you don’t have to dip in and out of it, it could be money for when you finished work and want to travel the world!
It’s not as difficult as it’s made out to be. Financial advice is biased towards investments, it’s where ‘advisors’ make their money from you, but they skip the personal bit.
Personal financial advice, should be given by you to you. Only you know how to control what you do with your money.