Following our insightful seminar earlier in the year with Mercer Marsh, addressing the current financial climate, we thought now is a good time to revisit this topic, particularly considering the soaring inflation rates. In a recent survey, Mercer Marsh revealed that a staggering 45% of adults felt uncertain about managing their finances amid these economic challenges, with one in three admitting that contemplating their financial situation exacerbates their stress. Anticipating significant cuts, 75% of respondents expected to scale back spending and saving.
To alleviate the financial strain, we turned to our valued partners who shared invaluable tips on budgeting and money management:
- Regular Financial Review: Consistently review your incoming and outgoing finances on a monthly basis.
- Detailed Breakdown: Break down outgoing costs, encompassing upcoming social events and other expenditures.
- Excel Spreadsheet Mastery: Create a monthly Excel spreadsheet to comprehensively track all financial transactions.
- Excel Budget Planner: Initiate an Excel budget planner to meticulously plan and monitor your financial goals.
- Credit Card Wisdom: Pay off credit card balances in full to avoid accruing unnecessary interest.
- Post-Financing Savings: When paying off finance agreements, redirect the saved funds into a dedicated savings account.
- Automated Savings: Set up a monthly standing order to transfer funds to a savings account, regardless of the amount.
- Immediate Savings Allocation: Allocate a portion of your salary to a separate savings account on payday and live off the remaining funds.
- Credit Union Participation: Save with the local Credit Union through workplace affiliations.
- Tech Detox for Savings: Remove shopping apps, like Amazon, from your phone to resist impulsive purchases.
- Cash Envelope System: Withdraw a fixed amount of cash monthly and save it in designated envelopes for better budgeting.
- Payday Investing: Initiate a Payday Saving plan to invest a portion of your income immediately.
- Dedicated Savings Account: Maintain a separate savings account distinct from your primary account.
- Smart Online Grocery Shopping: Use spreadsheets for online food shopping to enhance cost-effective and planned purchases.
- Dual Savings Approach: Embrace a Christmas club share-save scheme and have a dedicated savings account.
- Strategic Shopping: Opt for online food shopping to avoid impulsive buying temptations.
- Efficient Meal Planning: Create a meal planner to minimise food wastage and buy only what is necessary.
- Automatic Sinking Funds: Set up automatic sinking funds for planned expenses.
- Takeaway App Detox: Delete takeaway food delivery apps to curb unnecessary expenses.
In addition, Mercer Marsh’s Senior Workplace Education Consultant, Connor Jones, shared a valuable budgeting rule, allocating 50% of income for housing, food, and utilities, 20% for savings (emergency fund, house deposit, and retirement), and 30% for discretionary spending (non-essentials).
For further financial guidance, consider exploring these resources:
To delve deeper into financial well-being, explore Mercer’s Financial Wellbeing Toolkit.
The comprehensive list of money management tips provided by our clients and the insightful budgeting rule from Mercer Marsh’s Connor Jones cover various aspects of financial well-being. However, to further enhance your financial literacy and money management skills, consider the following additions:
- Emergency Fund Priority: Prioritise building an emergency fund to cover unexpected expenses and financial setbacks.
- Review Subscriptions: Regularly assess and trim unnecessary subscriptions to streaming services, magazines, or other recurring payments.
- Comparison Shopping: Adopt a habit of comparing prices before making significant purchases to ensure you get the best value for your money.
- Continuous Learning: Invest time in educating yourself about personal finance through books, podcasts, or reputable online resources.
- Negotiation Skills: Hone your negotiation skills, especially when dealing with service providers, to secure better deals on bills and contracts.
- Tax Planning: Stay informed about tax incentives, deductions, and credits that can optimise your tax return and overall financial position.
- Regular Credit Checks: Routinely check your credit report to identify and rectify any errors, ensuring your credit score remains healthy.
- Sustainable Lifestyle Choices: Consider adopting a more sustainable lifestyle, which often aligns with cost-effective practices, such as energy conservation and reduced waste.
- Financial Literacy Courses: Explore online financial literacy courses or workshops that can provide in-depth knowledge on budgeting, investing, and long-term financial planning.
- Mindful Spending Habits: Develop mindful spending habits by assessing whether purchases align with your financial goals and values.
Remember, building strong financial habits takes time and consistency. Regularly reassess your financial situation and adjust your strategies as needed to adapt to changes in income, expenses, or financial goals.
