worse off. That’s because positive Financial Wellbeing means understanding more about your finances, achieving greater clarity, and creating a plan with realistic goals to feel more in control. For this, there are four stages to consider:

ACHIEVING PRESENT SECURITY

Present Security begins by calculating your ‘net worth’, which is a term usually associated with millionaires and celebrities, but we all have one. All you have to do is subtract your ‘liabilities’ (all your necessary outgoings and debts) from your ‘assets’ (all your incomings and stored value). Confused? Go over your finances for the previous month to do your calculation. As long as your net worth is greater than 0, you are financially secure! If not, and your liabilities exceed your income/assets, you’ll need to make some changes. There are a variety of options available, and you may want to start by seeing if switching utility providers could make a difference. Consolidating debt programmes can help you pay off your debts at a more affordable rate, and you might even want to explore the idea of moving to a cheaper property. Bippit can set you up with an impartial expert to explain all of these options and what to look out for.

ACHIEVING PRESENT FREEDOM

Present Freedom enables you to do the things that you want to do with the money you have available. The first thing you need to do is make a budget. If the word ‘budget’ makes you think of endless number crunching, don’t worry. All you have to remember is the golden rule: 50/30/20.
50% of your monthly income is for Essentials: rent, utilities, food,transport - things you cannot live without. If you’re spending slightly over 50% on these things that’s ok, but if you’re spending considerably over 50%, you might want to consider how you can boost your income or reduce the amount going out.

30% is your fun money. You should never feel guilty about spending money on things that make you happy, as long as you stick to your plan. If you’re struggling, make a list of 10 things that you couldn’t live without. Anything else, don’t waste your money on it!

20% of your monthly income should be to ‘pay yourself’. Save for your long term goals, create an emergency fund and pay back any additional debts you may have.

The main issue so many of us have with budgeting is we don’t want to spend our free time putting numbers into a spreadsheet. Luckily, apps and services like Bippit allow you to budget with a few taps of your phone.

ACHIEVING FUTURE SECURITY

There will always be uncertainties in the future - that’s not something we can ever eliminate. What you can do, however, is prepare in such a way so that you can absorb a Financial Shock that comes with unforeseen events. This is what we call Future Security. The first step in achieving future security is to create an emergency fund. Secondly, you may want to think about protection products, such as insurance for your home, car, valuables, and even yourself. Finally, you can take steps to making your family financially secure should you unexpectedly pass away.

ACHIEVING FUTURE FREEDOM

Future Freedom refers to making sure you’re on track to achieve the financial goals you see in your future. You may not have thought that far ahead, and you might feel that you’re still a bit young to be thinking about it, but these goals can only come to fruition once you’ve started planning - so why not make today the day?

Have a think about what you want to achieve by certain
points in the future. Here are some common examples, but
your future goals can be whatever you like.

Immediate future (1-2 years)
Be on top of day-to-day finances, have debts paid off and an emergency fund built.

Short-term (2-5 years)
Take regular holidays, buy a new car, get a better laptop.

Medium-term (5-10 years)
Put down a house deposit, save for a wedding, put money aside for raising kids.
Long-term (10+)
Have a comfortable, perhaps even early, retirement. Have a sufficient pension income, and funds available to help children with education/business ventures.