As we hurtle ever closer to Christmas, one thing is as certain as us over-indulging on turkey, chocolates, and mince pies; come January gyms up and down the country will be full to the rafters with well-intentioned newbies who feel inspired to make positive changes for the New Year.
But while the initial enthusiasm for working out dwindles quickly (54% of new gym members quit by June), we want to help you exercise your financial muscle.
This doesn’t involve you making sweeping changes that are doomed to failure.
At EBC we are firm believers that by making small but achievable changes, you’ll build consistent habits that will stick with you for the long-term.
Our 6 Favourite Tips To Help You Get Financially Fit.
1. Build an Emergency Fund
A recent poll by the Money Advice Service found that 40% of working adults have less than £100 in savings.
If you can afford to save just a little bit each month and can eventually get yourself into a position where you have at least 3-6 months of salary in savings, this can save you going into debt when problems do arise.
2. Create a Budget Plan
There’s nothing like putting your income and expenditure down on paper to focus the mind.
If your budget reveals that you spend less than you earn, you’re on the right track but if you are overspending, can you identify the non-essentials that can be removed.
For example, do you really need NetFlix, Disney +, Amazon Prime, Paramount +, Apple TV etc if they are stopping you from getting your finances straight?
Irrespective of whether we’re within budget or not, it’s always worth taking time out to ensure that for our essentials, we regularly evaluate if we could get them at a lower price.
For example, it’s always good practice to shop around when it’s time to renew insurances, as there’s no guarantee that the existing provider is offering the very best deal.
3. Reduce/eliminate debt
If you’ve had a credit card for more than 2 years, typically any balance you have on it will attract an interest rate well in excess of 20%.
It’s therefore worth considering a balance transfer; you’ll get a new card to pay off debt on old credit and store cards, so you owe it instead, but at 0% interest.
The usual period where there is no interest on the new care is 2-3 years (sometimes there is a small set-up fee) and it means you become debt-free quicker, as more of your repayments reduce the debt, rather than pay interest. The key element is to remember to cut up your old card so there’s no temptation to spend on it again.
4. Get an Accountability Partner
Just as we get fitter and stronger if we hire a personal trainer at the gym, having someone work with us on our journey to financial fitness helps keep us on track.
This could be a person/group you know who are all working on their individual finances and can reach out to each other for help and support.
Alternatively, you could think about taking on a Money Coach; a professional who works with you to create a plan specifically to meet your immediate needs and longer term goals.
5. Try the Downshift Challenge
This idea was created by Martyn Lewis (www.moneysavingexpert.com) and is becoming more necessary for everyone to consider as inflation forces the costs of our weekly shop higher and higher.
The theory is that we drop one brand level on our shopping to see if we can tell the difference in the quality of the item and if we can't, then we stick with the cheaper product.
For example, downshifting from a ‘premium’ market-leading brand of tea bags to the supermarket own brand leads to a 46% saving!
The point isn't to drop down a level on everything you buy, but to ensure you're not overspending without reason. If it’s impossible to tell the difference with the lower brand level, then why pay more?
6. Examine what is on offer from your employer
At EBC we make benefits as good as they can be, and then support employers so that their employees engage and gain value from them.
For a recent project we helped a new client establish a flexible benefits portal which automatically comes with a reward site giving staff access to savings on all the major supermarkets, plus discounts from a wealth of leisure and activity providers.
The savings over a year are significant, so it’s worth examining if your employer offers something similar.
We also can’t forget that this is a time of year when we’re expected to participate in every event and it’s natural to feel compelled to spend money we don’t have.
If you need urgent help with your financial and mental wellbeing, many employers offer support through employee assistance programs.
If this isn’t available, there are other organisations that can help; StepChange, MoneyHelper and National Debtline are excellent resources.