I need to manage my money! Our top tips to personal money management

Managing your finances can feel overwhelming. But getting it right might save you thousands of pounds every year, and help you find financial wellness and stability. It takes some patience and commitment, but with this Loqbox guide, it doesn’t have to be daunting! Read on for tips and advice for personal money management.

Grab a cuppa, dig out your bills and bank statements, and settle down with pen and paper or a spreadsheet (whichever you prefer to work with).

At first it might look like a wall of numbers. And mounting living costs and debts can bring on anxiety. But if you break it down into bite-size chunks and take it one step at a time, it might be easier than you think!




Why should I manage my money?

Keeping track of your earnings and expenditure is the best way to take control of your finances. Not only does it help you to live within your means, it also helps to alleviate money worries.

Understanding your money will let you:

  • avoid unplanned debt

  • save for the important things

  • and build a better credit score (more on that later)



Looking after your finances will help you build a stronger foundation and get you better deals from loans and mortgages, which in turn saves you more money in the future. Savings can earn you interest and you can even start investing. So how can you go about empowering your finances?



Create a budget

To manage your money effectively, you first need to make a budget. Budgets can seem complicated but they’re not all that bad. Just think of it as a way of comparing what you earn with what you spend. There are loads of apps and tools that can help you, but the key is just to get it all down in one place.

Spreadsheets are your friend because they’re neat, tidy, and easy to update. But a big bit of paper and some pens will also do the trick.

Grab all your bills and bank statements and start listing all of your regular spending. These can be monthly payments, but don’t forget your annual costs like your car’s MOT. Break those down into monthly chunks too.



Take a look at things like:

  • General living and travel costs

  • Energy and utility bills

  • Supermarket receipts

  • Minimum payments for credit cards and loans

  • Leisure and entertainment costs

Add these costs up for a year total and divide it into 12 months. This will be your total expenditure. That’s what’s going out. How does it compare with what’s coming in?



It may seem obvious but make sure that you aren’t spending more than you are earning

Break down your expenditure into what’s absolutely necessary (what you need) and what could you live without (the things you want). Be realistic and honest. You have to pay your rent, but do you regularly use your gym membership? Your credit card payments are crucial, but have you watched anything on your streaming services this month? 

Trimming some of these ‘wants’ is a great way to make immediate savings. Of course you should still leave some space in your budget for stuff you want if you can. But how much?

Try the 50/20/30 budget plan. Simply take your income and split it into 50% for what you need, 20% for your savings and that leaves 30% for things that you want. You can read more about the 50/20/30 budgeting and other potential rules to manage your personal finances, here.

Make sure that you review your budget regularly. Things change all the time. Leaving it for a whole year could mean you miss some great opportunities to save money!




Use price comparison websites

When you have all of your outgoings listed, separate out those payments that you need to make. These might be things like rent or mortgage, utility bills, car tax and grocery shopping. You’ll probably find that this makes up the majority of your expenditure. But there may be plenty of room for savings here, too. 

Get on comparison sites and make sure you’re getting the best possible deals. Most of these companies exist in a competitive market and are always looking to grab customers. Don’t just sit with one provider because it’s the one you’ve always used. You could be saving hundreds across the year by switching to better offers.

Keep an eye on when your contracts are coming to an end. Maybe set reminders so that you don’t let them renew automatically without casting your eye over what’s on offer elsewhere. You could be missing out on a better deal.

Remember that companies will sometimes offer better deals to new customers. It can pay to switch!




Pay off your debts

It may seem obvious (and definitely easier said than done!), but prioritising your debts is a great way to improve your personal money management. Debts often come with high monthly interest payments. That’s money you could be saving or investing, so getting it under control will help to empower your finances.

There are different ways of tackling your debts. You can hit the biggest ones first to clear the highest interest payments, which ease the strain when dealing with the others. Or you can start clearing the smaller ones so that you can focus on your larger obligations. Either way, you want to get rid of those interest payments as soon as possible.

It is worth saying that while you want to get rid of your debts, making sure that you are at least paying your minimum payments every month is also super important. Ignoring debts, or even sacrificing one to pay off another, is a sure way to see them escalate (not to mention denting your credit score by missing a payment). This can result in problems further down the line so keep them all ticking over while there’s still money to pay.

We know that debts can be overwhelming and scary. They can get out of control. If you’re really struggling, remember that there’s lots of help out there. You can speak to your lenders about debts to look at options. You can also consolidate your debts to try and make them more manageable with one repayment plan rather than lots. You can also speak to StepChange for free help around debt and money management advice.




Start saving

If you can, try and create a savings account. Set yourself a savings goal and remember to make it realistic. If you give yourself a target that’s too difficult to reach, you could end up losing motivation, which will make sticking with it harder. So be fair to yourself, and you’ll find that with persistence and patience your savings will start to blossom.

A good savings goal to start with is an emergency fund. This is a pot of money that you grow to help you cover any surprises life might throw at you. Set a target of at least three months of your essential outgoings and start saving towards it. This will help with your financial wellbeing, knowing that you have a cushion to fall back on in the event of redundancy or illness.

Using the 50/20/30 budget plan (mentioned above) you can put 20% of your income into your savings every month. When you set your savings target, divide it by your 20% monthly savings number and that will tell you how long it should take to achieve. This will help you to keep your targets manageable and realistic.

Set up direct debits that are timed to come out just after your income lands, like the day after. Automatic payments going straight into your savings account means you’re much less likely to miss any or be tempted to spend the money on something else. Even small monthly payments will add up if you just keep at it.

Good news – you can boost your credit score at the same time as you save just by getting started with Loqbox Save. Set your savings goal and make your regular payments, and we report your activity to the three main credit reference agencies (CRAs) in the UK: Experian, Equifax and TransUnion. You can read more about CRAs here.




Grow your credit score

Your credit score is a number that lets you know how creditworthy you appear to lenders. You can learn more about what is a credit score here, but the gist is that when you apply for a loan, credit card or mortgage, lenders will check your credit report to decide whether they’re willing to accept you and what deal they are able to give you. 

Having a higher credit score will help you get the best possible deal. This might mean you can borrow more and pay less in interest rates, which can ultimately save you £1,000s!

You can check your credit score for free and without affecting it with one of these services:

ClearScore (uses Equifax data)*

Credit Club (uses Experian data)

Intuit Credit Karma (uses TransUnion data)


*By the way, if you sign up to ClearScore using this link we’ll get a little commission.


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Sign up for our monthly emails and we’ll do our best to help you find your way on your journey with money
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Give your credit score a boost
For just £2.50 a week, you could see your credit score rise by up to 300 points in the first three months
Get started
Improvements to your credit score are not guaranteed