Financial fitness is about feeling comfortable and in control of your financial position. It means having the knowledge and confidence to make the most of your money – both every day and in the future.
It’s easier said than done, and we know things are tough right now, but here are five ways you can improve your financial fitness.
Plan your spending
Just like a balanced diet can positively impact your physical health, a budget can spark an improvement in your financial health. It helps you take control of your money, and lets you know if you need to do a bit more to make things balance, like getting a job or considering slightly cheaper accommodation for the next academic year.
A budget should include all your income, and all your regular spending, like your rent, gym membership, and subscriptions.
Use an online budget calculator, such as this one from Money Helper, or just grab a piece of paper and a calculator and follow the instructions on our Portal page. It doesn’t take long, and the results will give you invaluable knowledge of where you are, and what you need to do next.
Keep track of your spending
Creating a budget is relatively easy but sticking to one can be more difficult, so monitoring your spending is important. Most banking apps have budgeting tools which automatically categorise your spending and tell you how much you’ve spent at specific retailers.
The most important thing here is knowing where your money is going. When you’re worried about your finances, it’s easy to ignore your spending, so make sure you get in to the habit of checking your bank statements regularly.
Being aware of what’s coming in and going out of your account means you can pick up on overspending and deal with it before it becomes a bigger problem.
Avoid borrowing
Many people borrow money so they can afford larger purchases like houses and cars, so borrowing money isn’t always a bad thing.
When it’s planned well, used appropriately, and paid off on time, it can be beneficial. However, it can also quickly spiral if not managed correctly, or your circumstances change suddenly.
Credit cards and Buy Now Pay Later and popular options for student borrowing, but remember. when you use these payment methods, you’re committing to paying for those purchases over a long period of time, so if something changes, you might struggle to make your repayments.
Buy Now Pay Later encourages you to overspend or buy things you might not be able to afford. A £240 tablet doesn’t seem as expensive when you only have to pay £80 per month.
Think carefully before buying anything in this way. It’s usually better to save a little more and buy it a bit later on when you can pay in full.
Don’t get caught up in discounts
As a student, you can find a discount on pretty much everything, so you need to be careful not to get in to a mindset of buying things just because you get a discount.
Try to think of it in terms of how much you’re paying, rather than how much you’re saving. If an item you want to buy is £40 with 20% off, you’re saving £8 but you still have to pay £32.
One of the best ways to not be tempted by discounts is to unsubscribe from email lists. On a daily basis, we get bombarded by emails trying to get us to spend money, so hit that unsubscribe link at the bottom of those emails and take back control.
Plan for the future
We never know what the future holds. Your car could break down, your rent could go up for the next academic year, or you could have to pay a deposit you weren’t expecting.
Whatever the circumstance, it’s a good idea to try to build an emergency fund, however small. Saving just £5 a week means you’d have £260 at the end of your first year. Even having a small amount saved can have a big impact if something changes or something unexpected crops up.
So there you have it; five ways to boost your financial fitness. These are a great starting point, but there’s so many more ways to put the focus on your financial health.
Head over to our Portal page to find out lots of ways you can save money, or if you’re on the move, listen to the Student Support Podcast to get money tips on the go, as well as lots of other useful information from Student Services.
Even a small change can have a hugely positive impact on your finances, so give it a go and see what impact it can have for you.