In construction, managing money can be challenging due to irregular income, seasonal work, and self-employment. Financial pressure doesn’t just affect your wallet—it impacts your mental health and wellbeing. Personal Finance Week is here to equip you with tools and advice to navigate these challenges and take the stress out of managing your money.
Tips and Advice for Managing Your Finances
1. Budgeting Basics
- A budget helps you control your spending and prepare for irregular income.
- Tips to get started:
- Before we start budgeting. Think about how you are going to do it. Are you happier with a mobile app? A spreadsheet? Or a pen and paper?
- Add up the earnings of everyone in your house who pays bills after tax, national insurance and any pension or student loan contributions. Your net pay on your payslips will tell you this amount. If you are self-employed, remember that you need to set aside an amount for tax and national insurance. That amount will depend on where you live and how much you are earning.
- Look at your bank statements from the last 3 months.
- Sort each expense into categories of what is NEEDED, what is WANTED and what is for FUTURE PLANNING (such as savings or paying debts)
- Make sure that your direct debits come out as soon as you have been paid. Or some banking apps can set aside your money into pots for bills to stop you from spending it.
- Divide what money is left after bills by 4, to give you a rough weekly budget.
- There is no judgement there if you can't set aside 20% for savings/debt and you're just getting by.
2. Smarter Saving Strategies
- Savings provide a safety net for unexpected costs, like broken tools or time off work.
- Tips to build savings:
- Start small: Even saving £10–£20 a week can add up.
- Open a separate savings account to keep your funds safe from daily expenses.
- Automate your savings by setting up a standing order to transfer money right after payday.
- Set clear goals: For example, “Save £500 for emergencies” or “Save £1,500 for a new vehicle.”
3. Managing Debt
- Taking control of debt reduces stress and improves financial stability.
- Tips for debt management:
- List all your debts, including the balance, interest rate, and minimum payment for each.
- Focus on paying off high-interest debts first, like credit cards or payday loans.
- Avoid taking on new debt where possible, especially high-cost credit.
4. Understanding Taxation
- Knowing how taxes work can save you money and avoid penalties.
- Tips for tax management:
- For PAYE workers: Check your tax code—it should reflect your personal circumstances.
- For self-employed workers:
- Set aside at least 20% of your income for tax.
- Keep receipts for deductible expenses like tools, fuel, and protective clothing.
- Consider using accounting software or a spreadsheet to track income and expenses.
5. Planning for the Future
- Preparing for retirement or big life goals now reduces financial stress later.
- Tips for long-term planning:
- If you’re employed, check if your employer offers a workplace pension and contribute as much as possible.
- If self-employed, consider opening a private pension like a SIPP (Self-Invested Personal Pension).
- Learn about basic investment options, like ISAs, to grow your savings over time.
- Set future-focused goals, like “Save £10,000 for a house deposit” or “Have £100,000 in a pension by age 60.”
Free Resources to Help You Get Started
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Our Financial Wellbeing page has plenty of resources for you, such as:
- Money Helper: The platform aims to help people to clear their debts, reduce spending and make the most of their income by cutting through the jargon and complexity, explaining what you need to do and how you can do it. - Nudge: Free information and advice around money can be complex, overwhelming and conflicting but NUDGE resolves this by providing personalised and unbiased financial information in a simple way. |
