Money expert's five easy tips to boost your finances & where you're wasting cash without realising

Scottish Sun

6 hours ago

WISE UP Money expert's five easy tips to boost your finances & where you're wasting cash without realising
AS costs continue to rise, people's understanding of their own money situation is plummetting.
Whether someone is earning big bucks or barely scraping by, Scots often have no clue about their real bank balance, according to the experts.
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Lots of people in Scotland don't have a clue about their finances.
Credit: Getty
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Daniel Hough has some top tips for people needing financial help.
Credit: Les Gallagher
Studies show that 39 per cent of UK adults don't feel confident in managing money, with three quarters falling below the financial literacy benchmark.
Financial planner Daniel Hough, who works for RBC Brewin Dolphin, would love to see a bigger emphasis placed on educating people about the ways money makes the world go round.
He said: 'I'm a massive advocate for making sure that there is more education, not just in schools, but even in the workplace. There should be something about understanding tax, doing finances and what a bank account is in the curriculum.
'People need to check their pensions, make sure they've got an understanding of their bank account, understand legal documents and what happens taking on debt, and be more aware generally.'
Here the money guru shares his tips for boosting your finances in five areas.
DON'T COMPARE
The expert said that Scots must focus on their own finances, rather than looking to others.
Daniel said: 'We see it so often in someone's lifestyle, that they want to make sure that they're getting the best. Many people drive a nice flashy motor, but their monthly cost is hundreds of pounds. And I effectively refer to it as a mortgage on wheels because you don't own that asset.
'You'll look at a lot of people with designer goods, but many wealthy individuals that we deal with don't buy luxury or designer goods and they are comfortable in what they have.
'You don't want to be comparing yourself to those leading lifestyles that might not be affordable for the average individual.'
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And he reckons one big convenience is a financial red flag.
He says: 'What scared me recently is you can now order a takeaway on Klarna. So even if people don't have the means to pay for it, they will go ahead anyway.'
GOING IN, GOING OUT
Cash used to be king, but these days people can go days without handling notes or coins.
And the pro says this makes it even more vital to be keeping an eye on your accounts.
He said: 'In today's world, you have everything as more or less a subscription service. In years gone by, you really just had gas, electric, council tax and a mortgage. Now you have TV, music and gym subscriptions and car payments.
SHOCK STATS
A MAJOR report revealed that more than half of all children in the UK didn't receive any meaningful financial education.
The Money and Pensions Service (MaPS) learned that just 47 per cent benefited from proper lessons.
When the survey, based on kids aged seven to 17, was extended across five and six-year-olds, it was estimated that 5.4 million youngsters don't have the money skills they'll need in adulthood.
The poll asked if they remembered getting a financial education at school that they considered useful, with only a quarter saying they had.
They were also asked if they received regular money from either parents or work, if their parents set rules on it and whether they were given responsibility for spending decisions, with 14 per cent saying yes to all three.
Those in Scotland were the most likely to have received some sort of financial education - with 52 per cent followed by Wales at 51 per cent, England with 46 per cent and Northern Ireland, 43 per cent.
MaPS has targeted two million more children to get a financial education by 2030, by asking all parents to talk to their children about money and combine it with everyday experiences, such as food shopping, budgeting and wages from a part-time job.
'With the way we bank now, it's obviously all online. When you had your cash in hand, you could absolutely budget everything that you wanted. But when it goes into your current account, you don't really have a very good oversight of it.
'If someone gets paid and all their direct debits come out at once, they might not have a good handle on it.
'Some people don't know what's coming in and out and bury their heads in the sand. And that's dangerous, so you need to be on top of it.'
PENSIONS
Retirement may seem like years off, but Daniel said you must start planning for your later years now.
The expert explained: 'Everyone that goes into work has auto-enrolment, where the absolute minimum is the employee pays five per cent of their salary and the employer pays three per cent. But there are a lot of companies that have better contributions to try to entice members of staff.
'I would always say to never settle for the minimum and to even increase your contributions by one per cent, because realistically you won't notice that leaving your account.
' The younger individuals entering into the job market are probably saving for a mortgage but they won't miss an extra £10 a month.
'I would definitely be advocating for two things, firstly making sure that your pension contributions are comfortable and also having an understanding of where your pension is and what exactly it's invested in.'
MAKING YOUR OWN JOB
There are an estimated 300,000 people who are self-employed in Scotland, and the expert says it's key that these people clue up on their finances.
He said 'I think individuals that are employed tend to have a bit more of a safety blanket in place, so they've got pensions, they might have a share incentive plan, they'll have death in service, they might have a critical illness plan and have the support of sick pay as well if something happens.
'If you go down the self-employed route, you don't have those protections, unless you go out your way to seek them out yourself.
'So particularly for those individuals that have a spouse or children in their lives, it's vital when you are running your own business to look out for all of these things.
'Most individuals who are self-employed don't have this knowledge unless they choose to go out and understand it themselves.'
FUTURE
While looking after your cash is important, getting your other affairs in order can also impact your financial welfare in the long run.
Daniel explained: 'It doesn't just have to be about finances themselves, it also can be about legal documents as well. If you have a spouse or children, I would absolutely recommend getting a will sorted. And if you're an older individual, then definitely get a power of attorney in place as well.
'These are things that are often forgotten about until much later on and sometimes when it's too late. People need to know who to contact when they need help and the implications of missed tax.
'But they also need to know the consequences of incorrect legal documents or having none at all. It's a very slippery path you could be headed down.
'If you do need advice or help for whatever reason, the first point of contact would be Citizens Advice.'