How to manage your finances

Taking the time to manage your finances could really help you stay on top of your bills, put some money away for emergencies and have a positive impact on your future. Whilst the majority of money saving advice consists of the generic, ‘cut back on your monthly spending’, according to the experts there are ways you can effectively manage your money within the workplace. Here are four ways you can manage your money within the workplace, whilst progressing in your career.

Ask about the benefits your work gives

The Telegraph state that businesses lose an estimated £2.7 billion a year by failing to tell staff about the benefits they can offer them. They suggest that  it is always worth asking your employer if there are any benefits you and your colleagues are eligible for. Whether it is as a reduced tariff on a mobile phone contract or discounts at local eateries, most businesses offer their employees a few perks.

Even something as simple as your employers providing free fresh fruit, tea or coffee can help you save costs; everyday essentials many would buy themselves. Some businesses also offer free eye tests, cheaper gym memberships and so much more – all you have to do is ask.

Think about signing up to Salary Sacrifice

Signing up to a salary sacrifice means that you and your employer have an arrangement where an amount of your cash pay is deducted in return for non-cash benefits, such as leasing a new car. Tom McPhail from This Money discusses the pros and cons of signing up to a salary sacrifice and how it reduces your National Insurance (NI) payments.

This ‘salary sacrifice’ scheme is quite widely used by employers now, because of the money it saves. It works less well once your income goes over the Upper Earnings Limit (£42,385 IN 2015/16) because your personal liability to NI drops to just 2 percent above this threshold but it is still a way to save money.”

However, it’s important to do your research. Fleet News state that signing onto salary sacrifice doesn’t work for all companies and their employers, and in extreme cases, it can lose money rather than save. Furthermore, Money Advice Service states that sacrificing part of your salary may affect maternity, paternity and pension pay.

“Because your salary is lower as a result of salary sacrifice, any life cover through a scheme at work could be less if it’s based on your lower salary. It’s worth checking – some employers do provide life cover at your original salary so you don’t lose out.”

Start Saving for the Future

According to employment agency Reed, workplace pensions are a great way to save money for your retirement as employers will often match any contributions made. Guy at Money Saving Expert states that workplace pension schemes are a tax-free way to save money for your future, without a lot of risks.

Pension saving is a tax-efficient option that isn’t implicitly risky. The risk comes from the investment choice. Safer investments, such as putting your money in cash rather than exposing it to the risks of the stock market, are available.

There is also an option of undertaking a personal pension plan. However, money has been lost for those who were advised to transfer their workplace pension to a personal pension.

The Pension Advisory Service state that there are very few scenarios where this is preferable and people have been ill advised into doing so. There have also been cases where people were mis-sold pensions that did not take aspects of their lifestyle into consideration and have been sold incorrect pension annuity.

According to The Telegraph there are thousands of people who have been financially affected and could be owed compensation. They state that you should always check the fine print of their pension to ensure that they will not lose out financially.

Check for Eligible Insurance

Similarly to workplace benefits, some workplaces offer subsidised or free insurance policies, such as mobile phone and gadget insurance. Some companies also offer reduced rates for  private health care and dental insurance.

You may already have some of these benefits if you pay a fee for your bank account, also know as a ‘Packaged Bank Account’. Rather than have duplicate policies, you could potentially save anywhere between £5-£35 every month and have the cover you need as. But, if you have already had one of these accounts, the Financial Ombudsman service warns;

‘Some people couldn’t have used any of the accounts extras – or couldn’t use the extras they’d specifically opened it for’

If you do decide to buy insurance from your employer, Money Advice Service suggests that read each contract to make sure that you are paying for insurance you will actually use, alongside knowing the terms and conditions of exactly what is covered, to avoid being mis-sold insurance.

Born in Birmingham with a degree from the University of Chester, I’m an aspiring business writer with experience working with financial firms such as EMCAS.