Six things everyone can do to ensure their financial health

Mortgage costs are up. Private rents are sky high. The cost of living is, well, costly. You may be asking yourself how you can better manage your money in these challenging times. Well, it’s the final day of June, and the midpoint of the year seems like as good a time as any for a reset. Here are six things you can do right now to improve your financial wellbeing.

Let’s acknowledge that being “good” with money isn’t just about learning the practical stuff. After all, with the abundance of resources available to us online, we aren’t exactly short of information on how to budget and save.

The fact is, our emotions and beliefs can affect how we approach out finances just as much as our practical knowledge can.

Emotions such as fear, despair, guilt, shame, sadness and anger can all influence our behaviour with money. Beliefs such as “I can’t be better with money because I wasn’t taught how growing up”, or “I don’t deserve to spend money on myself” can also impact our financial health.

Writing down your answers to the following questions in this self-awareness activity can help you start to understand why you do what you do – and don’t do – with money:

Working out what matters to you most in life and linking that to how you manage your money is the starting point of financial wellbeing.

For some it’s family, for others it’s adventure. Perhaps it’s community, freedom or growth. Aim to identify around five core values. In a world full of options, temptations, and other people’s expectations, getting clear on what matters to you most can help you prioritise how you spend your time and your money.

Once you’ve identified what those values are, ask yourself: how do I want to spend, save, and invest my money in line with this?

For example, if “family” is one of your core values, then family holidays may be important to you. However, this can range from low-cost days out close to home, to camping trips, to all-inclusive holidays abroad. You should always prioritise those things that matter most to you, but on the other hand, just because you value something doesn’t mean you have to break the bank.

How much does it cost to be you? The roof over your head, the food you eat, the bills you pay, the clothes you wear, the car you drive. You get the idea.

Work out where your money actually goes – not just where you think it goes.

You can track your spending for a set period – say, a month. Alternatively, you can look back and review your past spending (which is easier if you do most of your spending by card).

Whether tracking or reviewing, simply make a note of everything you spend money on. Suspend judgement and get curious. Ask yourself: Where does my money actually go?

Once you’ve worked out where your money is going, you can use this data to produce an informed budget.

A budget is your estimate of money you have coming in minus money you have going out for a set period (for example a month or week depending on your income and outgoings cycle).

It is also a forward planning tool. Done in advance, it will tell you if there’s enough money coming in to cover your planned outgoings. If yes, great. If not, you can adjust accordingly.

A budget helps you prioritise spending and consider the big picture, in terms of putting money aside now to achieve future financial goals.

Think of your savings as a financial buffer – your first line of defence against financial stress.

You’ve probably heard that having savings put aside to cover your monthly outgoings for three to six months is a good safety net.

Try not to get bogged down in thinking that if you can’t save a lot, there’s no point saving a little. After all, you need to save that first £1 to get to your first £1,000.

Start small and repeat the action. That’s how to build a savings habit. And if you need to use your savings, then they’ve worked as intended. Rebuild when you’re ready and able.

Whatever your income, if you’re struggling to cover your basic monthly outgoings including mortgage/rent, household bills, and minimum credit card or loan repayments, that’s a sign to seek help.

The financial guidance website MoneyHelper has a debt advice locator which lists where you can access free debt advice.

Remember: while these may seem like small steps, they are crucial to taking control of your financial future. When it comes to managing your money, even small steps can make a big difference.

Talia Loderick is a money coach, who helps people to understand and take control of their finances. Her website can be found here.