Smart money moves: A student guide to financial wellbeing 

Financial wellbeing is all about having a good relationship with your money. It's about how you feel about managing your finances. It's never too late to begin getting a better overview of where  your money goes. And actually, it can give you more freedom to do the things you really enjoy in life. Building better money habits can empower you to become more financially secure, so you don't have to stress day-to-day. 

Financial wellbeing can often be broken down into four key areas: 

• Security: This looks at both the present and the future. In the present, it's about how much control you have over your day-to-day and month-to-month finances. Do you know where your money is coming from and where it's going? When we look at the future, it comes down to your capacity to handle financial surprises. What if that Student Finance or employer payment arrives late? Can you cover your main expenses without relying on your overdraft or credit card? 

• Freedom of Choice: Similar to 'Security', this looks different now and in the future. Right now, it gives you the ability and financial freedom to make choices to enjoy life. For example, if your uni mate asks you to join them for a last-minute getaway to Edinburgh, can you join them on a whim? Or do you have to review your overall finances first? 

• Future Goals: This is about how on track you are to meet your financial goals. Maybe you've been saving up to buy a new laptop. How many months did that take you? 

• Peace of Mind: As you can see, setting up the foundations for good financial wellbeing can give you peace of mind both in your day-to-day life and in the near future. So, the earlier you learn about it, the better prepared you'll be down the line. Whatever life throws your way, you’ll be in a better position to manage it without too much stress. 

Before we dive into practical steps to boost your overall financial wellbeing, it's important to acknowledge that some factors are outside your control.

To sum it up, the social and economic environment you were born and grown into can either expand or limit your opportunities. Of course, this doesn't mean you can't improve your financial future. It’s easy to compare yourself to others who seem to have more cash, but remember that everyone starts from a different place.  Plus, your behaviour towards your finances is also shaped by your knowledge, personality, skills, and attitudes. At the end of the day, you and your choices will ultimately be the final piece of the puzzle that creates your level of financial wellbeing. 

1. Ignoring your spending: It's easy to bury your head in the sand, but not knowing where your money goes can lead to problems down the line. 

2. Not budgeting: Without a plan, it's hard to control your spending and save for your goals. 

3. Impulse buying: Those tempting deals and trendy items can quickly add up and derail your budget. 

4. Borrowing without a plan: Using credit cards or overdrafts without a clear repayment strategy can lead to debt that’s hard to shift. 

5. Not saving for emergencies: Life throws curveballs. Having a small emergency fund can prevent you from going into debt when unexpected expenses arise. 

Planning for a social event

Instead of just saying "yes" to every night out, you check your budget beforehand to make sure you can comfortably afford it. 

Saving for a trip

You set a realistic savings goal and regularly put aside a small amount each week, even if it's just the cost of a coffee or two. 

Dealing with an unexpected expense

When your laptop breaks down, you have a small emergency fund to cover the repair costs without having to take out a loan. 

Making informed spending choices

Before buying that new gadget, you consider if you really need it and compare prices to get the best deal. 

Feeling confident about your finances

You regularly check your bank balance and know where your money is going, which reduces financial stress. 

Now that you have a better understanding of what financial wellbeing is and what you can and can’t control, let’s look at some practices and habits that can help you in the long run: 

1. Balance and Live Within Your Means: This is a crucial factor that often gets overlooked, especially with constant ads bombarding us from our phones to billboards on the tube home. Pro-tip: One thing that can help prevent mindless purchases of the latest tech gadget or trendy jacket is to make a wish list in your notes app and wait a couple of days before taking any action. Or, if you already track your expenses, consider setting aside a specific amount (whether it’s £20 or £50 – it’s up to you!) for non-essential spending. 

2. Start Tracking Your Monthly Finances: It’s not as hard or scary as it sounds, we promise! And it’s the only way you’ll get a clear picture of whether you're overspending. Maybe you’re relying too much on Uber Eats for dinner? (Seriously, how many Uber Eats did you order last month?) We know life can get busy, but what if that £60 spent on Uber Eats last month was saved in your travel fund? That could easily cover a 2-day budget trip to a European city! 

3. Label Your Expenses & Automate Your Savings: If you’re wondering how to track all these expenses, there are many ways to choose from. You can track everything in Excel, Google Sheets, or Notion. You can also check if your banking app supports labels, as many do these days. Otherwise, you can download apps that can categorize your spending for you and even automate your savings. Whether it’s through round-ups (e.g., spending £2.47 on coffee and saving the £0.53) or by setting a consistent savings amount, the app will do it automatically. Easy peasy!