I do not know where to start with money
If this is you, welcome — you are in the majority. It’s easy to feel overwhelmed about dealing with money. Most people in the UK have never been taught about it at school, at home, or at work, so not knowing where to start is the starting point for almost everyone.
You start by getting a clear picture of what is coming in, what is going out, what is left over, how much you have saved and what you owe. Spreadsheets, apps, or courses and articles like the ones here will help but you can come to them later. What you need is an hour or so to go through your bank statements (bank app) and to gather any credit statements (e.g. credit cards; personal loans; Buy Now Pay Later accounts). Go through them and list any regular income you have coming in, the payments you have coming out and the amounts you owe and have saved. Getting your numbers straight is the beginning of taking control.
Once you have that picture, one thing becomes obvious: the gap (positive or negative) between what you earn and what you spend. Everything else in money — saving, investing, paying down debt, buying a house, getting rich — is built on top of that gap. Widening it, protecting it, and putting it to work.
Most people who feel lost with money are not lost because they are bad with money. They are lost because nobody ever showed them the picture. Once you see the picture, the decisions become much clearer and far less scary.
The picture has three parts. What comes in (salary, side work, student loan, anything). What goes out, split between fixed stuff you cannot change this month (rent, bills, phone, transport) and flexible stuff you can (food, going out, subscriptions, clothes). And what is left. If what is left is positive, you have choices to make about where it goes. If it is negative, you have choices to make about which flexible things shrink. If you have a positive gap the first thing to do is work out how quickly you can pay off existing debt so you can free up the gap to put your money to work. If it is negative and you have debt, in addition to working out how to cut your spending you’ll need to work out how to pay it down. There are avenues available starting with talking to your lenders, and I cover lots of the options in my courses and blogs on this site.
You don’t need to be good at maths. You need to be willing to look honestly at the numbers. The people who never get on top of their money are usually the people who don’t do this step because they think it will feel bad. It may feel uncomfortable the first time, when you realise where your money is going. But after that it will become empowering.
What you can actually do this week
- Pull up your bank app and review and categorise (add up similar items) everything you spent last month. This isn’t a budget yet — just taking stock.
- Cancel one subscription you forgot you had or you can do without. Almost everyone has one.
- Sign up for the free Money Sorted newsletter with a topic a week that will start building your money knowledge.