What would your top financial tips from your future self be?

Whatever age you are, and whatever the current state of your finances, you are likely to have regrets about decisions you made earlier in life – and perhaps opportunities that you missed – that could have put you in a better financial position than you are now.

Fast forward 10 or 20 years, and what advice would you give to yourself now? What kind of financial decisions and opportunities should you be taking now to help future-proof your finances?

In this article we look at five financial Do’s and Don’ts that your future self will thank you for, and give you five practical tips on how to get started on each of them..

✅   Maximise your income

• Whatever stage of life you are at, it makes sense to earn as much money as you can. So if you are in employment, look for opportunities to earn more money by either changing jobs, seeking promotion where you are, or asking for a pay rise.
• Also look for opportunities for occasional extra work on a temporary or seasonal basis. For example a few shifts in a local bar or restaurant, or a seasonal job in a store or event venue. A bit of extra effort now can help to make a difference in future.
• Set up a side hustle to earn extra money in a way to suit you. Find something that you enjoy and that could be in demand from others. For example, creative skills such as music, writing, art, jewellery making, photography, sewing, knitting, baking, photography can all be potential sources of income in your local community. As can various forms of practical help such as IT skills, DIY, gardening, petsitting and babysitting. 
• Sell goods online. Options here include decluttering your home and selling your own goods, selling goods for others and receiving some of the profits, or selling home made goods. Any of these could potentially bring in a small but steady additional income.
• You may also be able to make additional money from your home. If you have space inside the home, you could consider taking in a lodger. Otherwise if there is space outside, options could include renting out your driveway for parking or your garage or shed for storage. It could be worth some temporary inconvenience to keep building up your income.

❌  Don’t overspend

• One of the major financial mistakes that many people make is living outside our means. After all the essential bills have been met, it can be tempting to buy things to spoil ourselves, even if this means running up credit card debt. But it’s important to be disciplined about this, otherwise you end up just about managing from month to month with no savings and a growing credit card balance. So, a firm decision to cut back non-essential spending is key in getting your finances under control.
• Creating a monthly budget – then sticking to it – is the best way to help manage your finances. You need to track where your money is going and keep everything under review to find ways to cut down on spending. This takes time and effort, but will gradually begin to have a positive impact on your finances.
• Always be on the lookout for a better deal on bills such as energy, phone, TV, broadband, and insurance. A good place to start is by contacting your current provider to say you are thinking of switching and see if they can offer you anything better. You can also compare the cost of different providers on websites such as Money Supermarket, Compare the Market and USwitch. 
• Take time to plan your food shopping carefully and ensure that you know what you already have in the cupboard, fridge and freezer so that you can use up those items rather than letting them go to waste. Also try to get into the flow of batch cooking, so that when you make a meal you make double portions. Making double quantities is more economical than making two separate meals, and enables you to have a supply of frozen meals for later.
• When buying clothes and household goods, don’t automatically buy new. You may be able to find top quality nearly new goods either from online sites such as eBay and Facebook or in local charity shops. Every penny saved now will help towards a more secure financial future.

✅  Start building up savings

• There is so much different advice out there about savings. Some financial experts suggest that you should aim to have at least three months’ living expenses in savings. Others say that your monthly income should be divided into 50% on essential living expenses, 30% on non-essential spending, and 20% on saving money and/or paying off debt. It can all feel very overwhelming and completely unachievable. But the main thing to do is get started. Open a new savings account and put some money into it. Even if it’s only £5, you have made a start.
• Try to make regular payments into your savings account. The easiest way to do this is to set up a direct debit to pay money into it every month. Even if it is only a very small amount, you have taken the first step towards building savings. Treat your direct debit like any other monthly bill i.e. once it’s paid it’s gone and you don’t get it back. Just keep paying into your savings account and soon those savings will start to grow.
• Any time you get unexpected money – for example a gift, a win or a bonus – put some or all of it into your savings account. Remember that as your savings grow, you will be paid interest on them so your money will be working harder for you longer term than if you just spend it on whatever you are currently interested in.
• It can also help to try and see saving money as fun and a bit of a challenge. Think of it as fundraising for yourself. Find different ways to save bits of money either regularly or on a one-off basis, such as non-spend challenges. Every small amount will help to gradually build your savings.
• Double-check that there is no extra source of money that you have overlooked. For example, it’s always worth checking that HMRC has all your up to date information and that your tax code is correct, so that you are not paying too much. Also check whether there are any benefits you may be entitled to. If you do find any unexpected money, put it all into your savings.

❌  Don’t rely on bad debt

• In one sense, no debt is good. But some debt is definitely worse than others. Any kind of debt that could improve your long-term wealth could be seen as good debt. Examples of good debt include a mortgage on a home or a university student loan. But bad debt – especially credit cards – that is used to purchase goods and services such as holidays, clothing, phones, household gadgets etc can drag you down. So an important financial goal is to reduce existing bad debt and stop building it up further.
• Make a debt repayment plan, to work out which debt you are going to focus on clearing first, for example either the smallest or most expensive one. Do all that you can to reduce then get rid of that one debt. For example, you could try some of the above tips on maximising your income and use any extra money to reduce your bad debt.
• As well as focusing your efforts on one debt, remember to keep up with at least minimum repayments on all your other debts, otherwise your credit score will be adversely affected. 
• As a general rule you should avoid taking on any further debt during this period. But if you have so many different debts that it is hard to keep track of them, it could be worth considering taking out a debt consolidation loan to pay off all your existing debts and be left with only one monthly payment to make. But this needs to be affordable for you and with the clear purpose of clearing existing debt, not increasing your debt.
• If you are feeling overwhelmed by debt and need some help, there are professional organisations that can help. For more information check out our recent article Drowning in Debt? Where to find a lifeline.

✅  Invest in your future

• Coming back to the subject of savings, as well as building up general savings, it’s important to look further ahead. Think about what you might like to do later in life and what kind of money you would need to be able to do that. If you already have some savings, you may want to start moving some of them into another account to start building up some longer term savings.
• If you are prepared to lock your longer term savings away for a higher rate of interest, there are various options that could work for you. These include:
  • Notice accounts;
  • Bonds;
  • Premium bonds;
  • ISA;
  • Stocks and shares. But be aware that your money could go down as well as up.
• A very wise way to save for your long term future is to have one or more pensions. If your job has a workplace pension, make sure you are enrolled in it and also find out if you could pay additional contributions into it. This is worth doing as any additional money you pay into a pension will not be taxed. So whilst you will have a bit less money each month because it is going into your pension fund, you will also pay a bit less tax. The same applies if you set up a private pension, and bear in mind that you can access private pensions earlier than workplace or state pensions. 
• Property is also a great investment for the future, so if you have been planning to get on the property ladder this could be a good aim for 2026. Even if you have to really stretch yourself to get your first tiny property, or start with a shared ownership property, it is usually a sound investment and could pay real dividends in the long term.
• And one of the most important investments you can make for the future is yourself. If you have always wanted to gain more qualifications, perhaps with a view to changing your career, then now might be the time to explore ways of doing that. Not only could this bring you personal satisfaction, but also potentially longer term financial security. If you need a financial boost to do this, remember that Loans 2 Go offer a range of personal loans which may be able to help. Full details, including terms and conditions are available on our website. Borrowing is optional and may not be suitable for everyone, so always consider your circumstances and affordability before applying.

We hope that this article helps you to think carefully about your financial priorities, and perhaps start to make a few changes where needed. Changes that your future self will thank you for!

Remember to visit us here again soon at Loans 2 Go for more hints and tips on family finances and everyday living. 

This blog/article provides general information only and does not constitute financial advice.