According to the Money Charity, 12.8 million households have no, or less than £1,500, in savings.
How can so many of us have no savings? Is it because of the lack of information available, the information overload or that fact that these basic skills are never taught in school but expected to be common knowledge when paying taxes? With so many of us suffering and unsure about money, we knew this was something we had to learn, teach and share! We launched the Money Matters series fundamentally to support you in your conversations with and about Money.
What is money matters?
Money Matters is an essential 8-week course designed to guide you to a stress-free and prosperous financial life. The LMF money matters series consists of workshops covering four major themes: money mindset, budgeting, saving, personal investing and credit scores. The series was the idea of Barbora Juhaszova, who leads the Financial programme for LMFnetwork and works for Wollit as their head of marketing. Wollit kindly sponsored this series alongside Fledglink and Enation.
The following blog will provide you with a summary of what was discussed in the second workshop in the money matters series. The workshop was focused on the topic of budgeting:
- What is budgeting
- How to save money
- And provide tips on how you can be in control of your finances.
Saving for your future — Starts now
The workshop was divided into an educational workshop and live panel event.
The first 30 minutes of the workshop was led by Ellie Williams, who is the founder of This Girl Talks Money. Ellie focused on myths that people have about budgeting and debunked them!
Common budgeting fears include :
- That budgeting is really restrictive and that you can’t really have fun with your money if you are budgeting.
- That budgeting takes all the enjoyment out of earring money and spending money
- How are you able to buy a holiday, buy that coat that you want if you are budgeting.
- Budgeting is only for people in financial difficulties, to help to manage their money.
Ellie explained that rather than fearing budgeting, we can consider re-thinking about it in three categories :
- Essentials: in this category are everything you have to pay for, it covers all of your things like housing, utility, bills, grocery, things that you must pay to survive.
- Wants: it’s your lifestyle subscriptions, things like Netflix, going to nail salons.
- Future you: debt repayments, anything that is going to your savings, any contributions you are making towards investment.
She then further went on to explain spending plans, providing a simple example to prove that anyone can create, use and benefit from one :
Similar to the common rule of “50:30:20” in saving, the spending plan is such that :
50% of your money will go towards your essentials
30% of your money will go towards your wants
20% of your money will go towards your future you.
The second half of the workshop was a discussion between the speakers and attendees via a panel format. The discussion covered topics of spending, saving, budgeting, credit and debt.
The topic of interest edged around keeping yourself disciplined with saving and budgeting, Rachel explained that goal setting enables her to stay on track, whilst Sara considers investment key as it allows for money to grow in the bank. Krystle spoke of the importance of an emergency fund and that emotional spending, like any spending, should also be tracked to keep you disciplined and in control. During the workshop, it was evident that you couldn’t consider savings and budgeting without leaning into debt and credit. Though this was a workshop we were hosting in the future, we leaned into the questions to ensure attendees felt understood and upskilled. Rachel explained that credit rating is an indication of how a lender would assess you and your likelihood to spend and use credit, you have to give bank data in order to build an accurate credit rating, whilst Sara shared that you can increase your credit rating by giving the bank information on your previous spendings. The speakers ended the session sharing digital apps which help them keep finances manageable, these include : Sterling, Monzo and Chip.
Top tips from the panel —
- Use apps and digital banks to help you track your spendings e.g. Plum
- Prioritise spending that brings joy but only once practical budgeting has been addressed
- Set yourself small targets
- Research before making any and every decision
- Check the fees of bank accounts or fees associated with a bank account
- Invest now, doesn’t matter how old you are
- Have an emergency fund, which will mean that you will be less likely to spend your savings and know you are saving for the incase, something happens
- Think about your feelings and thoughts when spending and saving. Take a moment to understand these, noting them down or tracking all your spending
- Consider why you spend that money : it does give you happiness or can it be used to set up a more prosperous future?
- Use digital banks which come with clear notifications and an app on the phone, such as Starling bank
- Identify your goal, then decide if you want a saving account or want to invest
- Ask questions and stay curious
Before the workshop, 45% of attendees had no idea where to start saving and 52% feared not having enough to save. After the workshop, 78% felt more confident about how to start saving their money or were open to learning more, with 58% of attendees suggesting that they were committed to saving at least £50 per month. 37% of the attendees felt encouraged to go through their spendings to track their income vs outcomes and 16% of the attendees felt encouraged to start an emergency fund.
Setting goals and getting serious about saving your money may be scary, worrying and challenging. However, if 2020 has taught us anything it’s that we must be more prepared — life is uncertain, things can happen — are you prepared for the worst? Saving and budgeting is important for us to better live our lives, to prepare for the “what ifs” whilst aiming for that “why nots”. Our panellists all share the same sentiment : starting is the hardest part, so have a goal, start small and stay curious during the process.
A big thank you, Ellie, Sara, Krystle and Rachel, thank you for providing tips on how to save.
Thank you to our speaker:
- Ellie Austin Williams — Ellie is the mastermind behind This Girl Talks Money, the Instagram account and platform helping millennials and Gen Z break the taboo around money and master their finances.
- Sara Korchmaros — Sara is the CCO of the Recash app, which helps people save money through automatic cashback right on their card. This is a new application launching now in the UK.
- Krystle McGilvery — Krystle is a Financial Education Advocate, who helps everyone get the knowledge they need to achieve financial wellbeing. She is also the co-founder of Moneytelligence, where she aims to improve financial literacy in the UK through diverse events.
- Rachel Martin — Rachel is the founder and director of Accountant_She, the modern accountancy service made specifically for influencers, who is passionate about supporting female influencers. This time she will be sharing with us her tips and tricks for personal finances!
Written by Sana Khan, @LMFnetwork Intern and recent graduate. Edited by Sonya Barlow sonya barlow [@Sonyabarlowuk]