Speaker 1: Happy New Year. It's great to be back after the
Speaker 1: Christmas break. The new year always feels like a good
Speaker 1: time to have a fresh start and commit some new
Speaker 1: habits. And of course, this wouldn't be, A Little Bit Richer,
Speaker 1: if we didn't lean into that. So today I want
Speaker 1: to think about how we can make 2024 a great
Speaker 1: year for our money. I want to talk about how
Speaker 1: to give your finances a checkup. So I knew I
Speaker 1: wanted to get Iain Russell on the pod. He's the
Speaker 1: head of performance marketing at Moneyhub, a tech company who
Speaker 1: have developed a money management app that's a great tool
Speaker 1: if you want to meet those financial goals. So let's
Speaker 1: get right into it. Okay, so Iain, let's say someone's
Speaker 1: got a few hours that they're setting aside to go
Speaker 1: through their finances to get in good shape for this
Speaker 1: new year. What would you recommend that they focus on?
Iain Russell: As boring as it sounds, I would say set a
Iain Russell: budget. Take your income, deduct all of your bills, regular
Iain Russell: monthly outgoings, rent payments, mortgage payments, utilities, and then you've
Iain Russell: got your next pot of money that you can split
Iain Russell: between other needs, wants and savings. A popular model for
Iain Russell: that is the 50, 30, 20 rule. 50% goes towards the needs,
Iain Russell: 30% towards the wants, 20% towards savings. But you can
Iain Russell: be as flexible as you need to be because not
Iain Russell: everybody's the same. And then you can set smaller budgets
Iain Russell: within those categories to help you because it's really about
Iain Russell: just paying a bit more attention, taking control of what
Iain Russell: you earn, spend and save so that you're able to
Iain Russell: make better informed decisions going forward.
Speaker 1: Love the fact that you said budgeting because I think,
Speaker 1: like you said, it does sound boring, but it is
Speaker 1: almost like the beginning place, you need to start. You
Speaker 1: need to know where you're out of your money, how
Speaker 1: much is coming in, how much is going out, how
Speaker 1: much are you setting aside for the things that you need. So like
Speaker 1: I said, I think that's a crucial step one. But
Speaker 1: now let's say people have checked over their finances, they
Speaker 1: know where they're at, what are some good money habits
Speaker 1: that people can try and get into in this new year?
Iain Russell: So building an emergency fund. In Moneyhub, we have an
Iain Russell: Emergency Cash Builder as one of the tools, it just
Iain Russell: helps you start to set aside a bit of money
Iain Russell: for those unforeseen events that we know can come out
Iain Russell: of nowhere. Maybe they're in the back of the mind, "
Iain Russell: Oh, this could happen." Such as your car breaking down.
Speaker 1: I've had that, I've had that one too many times.
Speaker 1: It catches you out of nowhere. So if you don't
Speaker 1: have that cushion to fall back on, that can be
Speaker 1: very costly.
Iain Russell: Yeah, so it's very, very handy. It just gives you that
Iain Russell: peace of mind that you've been able to build that
Iain Russell: pot of money just to cover for these events. And
Iain Russell: then alongside that, looking at savings for the longer term,
Iain Russell: it's all about building that habit. It might be £ 10 a month, it
Iain Russell: could be £ 100 a month. It really doesn't matter. It's
Iain Russell: about getting that habit in place where you're being able
Iain Russell: to put a little bit of money aside for future
Iain Russell: term. And then managing debt would be the next one.
Iain Russell: Assessing what debt you have, looking to manage and bring
Iain Russell: down those with higher interest rates like credit cards. It
Iain Russell: just starts building that sort of healthy financial position for yourself.
Speaker 1: And setting aside a certain amount of money that you're
Speaker 1: going to spend throughout the month as well can help you.
Iain Russell: Yeah, managing the debt and saving, building the emergency cash fund,
Iain Russell: being able to build in that fund of money, and
Iain Russell: this is where the budget can come in. Again, you
Iain Russell: can set those smaller budgets on what you want to
Iain Russell: put towards eating out, or going to the cinema, kind
Iain Russell: of whatever you want, but you've got to make sure
Iain Russell: where you can that you're making that money work for
Iain Russell: you as well.
Speaker 1: It's so crucial. I think, like you mentioned, there's so
Speaker 1: many great tips you just gave about managing your money,
Speaker 1: thinking about the future, reducing down any debt, but it's
Speaker 1: still important to have a good time and enjoy yourself
Speaker 1: because there is a direct link between money and mental
Speaker 1: health. And if you're always thinking about, " Okay, I need
Speaker 1: to do this with my money." And not put it
Speaker 1: towards yourself. We want to make sure you start the
Speaker 1: new year right. You've got to also think about yourself.
Iain Russell: Yes.
Speaker 1: That's why we have a fun fund and we don't go
Speaker 1: crazy, so we don't go crazy. We budget, we set
Speaker 1: aside that money.
Iain Russell: That's it.
Speaker 1: That's what we do. So how exactly do money apps
Speaker 1: help with maintaining these new money habits that we want
Speaker 1: people to pick up?
Iain Russell: So money management apps like Moneyhub could do a lot
Iain Russell: of the heavy lifting for you. So for us it's about
Iain Russell: really bringing together all of your data in one place
Iain Russell: so you can connect all of your accounts, current accounts,
Iain Russell: credit cards, savings, mortgage, investments in one place. You then
Iain Russell: get a really true overview of your spending behavior. Apps
Iain Russell: like ours, it'll bring it all together and it can
Iain Russell: really then help you drill down into that spending analysis
Iain Russell: and let you again, set budgets in specific areas. Whether
Iain Russell: that's groceries or whether that is eating out or takeaways,
Iain Russell: and it's just giving you that true reflection to then
Iain Russell: let you go on and use all those tools knowing
Iain Russell: that you've got everything in one place. At the end of the day,
Iain Russell: what we want to try and do is to do
Iain Russell: that heavy lifting and give you that insight so you
Iain Russell: can make better informed decisions about what you then do next.
Speaker 1: I think that's great. I think for some people, initially
Speaker 1: it could be quite daunting, to see everything in one
Speaker 1: place. Sometimes it is easy to have the blinkers on when
Speaker 1: you have a current accounts, all different things in different
Speaker 1: places. But when you have everything all in one place, it can
Speaker 1: be daunting to begin with. But at least like you
Speaker 1: said, now you know where you are, exactly how much
Speaker 1: you have to play with, and you can be consistent
Speaker 1: with those good money habits. So let's stay on that
Speaker 1: topic of conversation. So let's talk about being in control
Speaker 1: of your finances. Why is it so important, as you
Speaker 1: mentioned already, to have things like financial safety nets for
Speaker 1: the future?
Iain Russell: Yeah, so like I said before, it's those unexpected surprises.
Iain Russell: Even some of those more expensive times of the year,
Iain Russell: we've just all probably had one of those with Christmas.
Iain Russell: Sometimes if we're honest, your budgets can suddenly start to
Iain Russell: go a bit out of the window in the festive spirit.
Speaker 1: You kind of just slightly go over when it's the
Speaker 1: festive time.
Iain Russell: Yeah, it's a really tricky one, which is why new year
Iain Russell: is so popular for then getting back into gear and
Iain Russell: getting on top of finances. Having that discipline to have
Iain Russell: that money aside for these events means that you're better
Iain Russell: equipped to then catch up after those more expensive periods.
Iain Russell: You can compensate for that, but then also you are
Iain Russell: covered for those bigger things. Like we mentioned before, if
Iain Russell: your car breaks down or your boiler breaks, washing machine,
Iain Russell: fridge, freezer, these are things you can't do without.
Speaker 1: Yeah.
Iain Russell: It sucks when it happens, but being able to have
Iain Russell: that to call on is just so important.
Speaker 1: I agree. As I mentioned earlier, I've had stuff with
Speaker 1: my car just randomly breaking down and having those financial
Speaker 1: safety nets means you don't have to dip into your
Speaker 1: everyday monthly income. You've got that pot of money that
Speaker 1: is there for these random things that happen. Like you
Speaker 1: said, things break down, things stop working. Maybe you need
Speaker 1: to travel from one place to another and you hadn't
Speaker 1: accounted for it. That's just the money that you can
Speaker 1: know comfortably if something happens, my everyday monthly finances that
Speaker 1: I've accounted for are going to be completely fine because
Speaker 1: I'll touch on this one pot that is dedicated to
Speaker 1: things, unexpected expenses that crop up.
Iain Russell: Yeah. As you say, yeah, it's the word, isn't it? We're saying they're surprises
Iain Russell: or they're unexpected.
Speaker 1: Sometimes-
Iain Russell: It's best to ...
Speaker 1: ... not nice surprises, but yet surprises.
Iain Russell: No. Exactly. You could be really budgeting everything to a
Iain Russell: real minute level, but we know that there's always those
Iain Russell: things that do become unexpected.
Speaker 1: Absolutely. I agree. So Iain, this might be a new
Speaker 1: year, but some habits have to stay the same, and
Speaker 1: mine is definitely one of those. So I'm going to
Speaker 1: ask you the question that I have always been asking,
Speaker 1: I guess, right at the end of the episode. What are
Speaker 1: your top three tips that you'd give our listeners to
Speaker 1: help them get a little bit richer?
Iain Russell: First top tip would be to maintain that financial discipline.
Iain Russell: Have a second thought when you're about to spend money
Iain Russell: about whether you definitely need it. If you're buying some
Iain Russell: new clothes, will you wear enough to justify the price?
Iain Russell: Would you potentially like to see that money sitting in
Iain Russell: a savings account or knocking off a bit of debt?
Iain Russell: Just taking that moment can really help get your mindset
Iain Russell: right when thinking about your finances. Second is to live
Iain Russell: below your means. Again, being mindful of those spending habits,
Iain Russell: allowing yourself that buffer to be able to top up
Iain Russell: your emergency pot. Final tip, start early. No matter how
Iain Russell: much you're able to put away, whether that's £ 10 or £200, or
Iain Russell: what your target is, if it's clearing debt, putting more
Iain Russell: into your savings account or topping up your pension, the
Iain Russell: earlier you start the better. It just gives you that
Iain Russell: bit of financial security and freedom.
Speaker 1: Iain, thank you so much for coming onto this episode. I
Speaker 1: feel like we're all rejuvenated and we're ready to tackle
Speaker 1: the new year with our finances and we're empowered and
Speaker 1: we're in control. So you've shared some amazing gems. Thank
Speaker 1: you so, so much.
Iain Russell: Thank you very much.
Speaker 1: Next week, I want to continue my episodes on property
Speaker 1: with a look at taking the second step on a
Speaker 1: house buying ladder. There's so much advice out there for
Speaker 1: first time buyers, but there's still a lot to think
Speaker 1: about when you're deciding whether to buy a property again.
Speaker 1: See you then, and in the meantime, follow the podcast,
Speaker 1: write a review, and tell a friend. It's three things
Speaker 1: that will really help other people get A Little Bit Richer
Speaker 1: too. Bye.