If you’re anything like me, you’re more likely to be following the latest trends on the LFW catwalk than you are trends concerning money saving tips. But it’s time to stop using your weekly phone call home as a way to wrangle advice out of your Financial Times-subscribing father, and start to get to grips with just what you can benefit from money-wise in 2017. You can now make investments or manage your money while you’re in Pret buying a coffee – so it’s actually pretty easy to make innovative money management part of your daily routine and… dare we say it… fun? I spoke to money expert and co-founder of website Good With Money, Rebecca O’Connor about the things every 20-something should know about, that will help them with their future finances this year. Notebooks and pens at the ready (or, then again, just let the financial tech apps sort it all out for you)...
Money saving tips:
The Moneybox app helps you invest your money every time you spend
If you find it difficult to put aside savings at the beginning of the month, Moneybox might be able to help. This app launched last year and rounds up each purchase you make to the nearest pound, investing your ‘spare change’ into companies such as Netflix and Disney. You don’t have to do anything once you’ve registered really, the app sorts all your investment powers out for you. Rebecca swears by it: ‘If regular direct debits are still too intimidating, Moneyboxapp rounds up your spending to the nearest £1 and puts the rounded-up amount into an investment account on your behalf,” she explained. ‘It's a great way to start investing for no hassle at all. It's brilliant actually, I use it and have saved loads without realising!’
Essentially, it gets you investing in stocks and share without even realising it. Although there’s an element of risk in investment, it’ll help you make more money in the long-run - much more than interest rates on savings accounts currently do. Watch the video explainer below for more and download it on the App Store here.
The best new budgeting apps to download in 2017
There are millions (okay, maybe a few dozen) budgeting apps on the App Store, and it’s tricky to know which ones will be worth your time (and your phone’s very limited storage). If you’ve been through a few, Squirrel is one that you won’t regret trying. It does all your budgeting for you, automatically separating your savings and your bill expenditure every time you get paid, leaving your current account with what’s left to spend as you will. It’s a simple idea, but it ticks off that job each month to transfer savings each time payday comes around. It helps you to ‘build healthy saving habits’ apparently, which sounds like an app we’d happily delete Candy Crush for.
Meet Cleo is another budgeting app whizz, and it’s one of the coolest things I’ve downloaded on my phone this week. I’m so excited by it as a budgeting concept that I’ve not been ashamed to show people its interface (and thus, my spending habits) to prove just how well it works as a piece of tech. Meet Cleo works with Facebook Messenger to let you know within seconds just how much you’re spending - and exactly what on. It only takes a couple of minutes to sign up, safely linking your bank account and income/bills information, to analyse your regular spending data. After registering, Cleo pops up in a Messenger alert, and so begins a constant conversation about your spending habits. It works well because you’re likely to be on Facebook Messenger more than you’d remember to log into a separate app, and Cleo sends you regular updates on exactly what’s leaving (and coming in to) your account.
It was really helpful for me this week in regards to budgeting my weekly transport. I’ve been trying to figure out whether I’d save money on a weekly travelcard for ages, but as I use contactless to get around, I was never sure exactly how much I was spending. Cleo told me I’d spent nearly £40 on travel this week (oh, London), so now I know, on an average week, a travelcard will save me money (it’s less than £30). She’s like my totally-non-flaky new best friend. She’s got strong emoji and GIF game too. Download it here.
The Lifetime ISA is basically completely free money from the government
How do you fancy £32,000 from the government to help you buy a house? For free? As house prices aren’t likely to go down significantly any time soon, the new Lifetime ISA might be another way you can get a foot on the housing ladder - while giving you a 25% bonus towards a house each year. It works similarly to a Help to Buy ISA, but with a little more freedom. Help To Buy is money that you can only use to buy your first home, but the new Lifetime ISA has a bit of flexibility - if you don’t use it to buy a house, it can go towards your pension instead. It was specifically branded as a savings product for the ‘new generation’ by former chancellor George Osborne at last March’s budget, and will be able for 18-39-year-olds from April 6 this year. There are some strings attached, though, (as there are for all ISAs): you’ve got stick to the T&Cs until your 50s, otherwise withdrawal charges can apply. Read more about the pros and cons here.
Fintech, or, er ‘financial technology’ is blowing up (in a good way)
If you’re not sure where to begin when it comes to managing your money, there are SO MANY APPS out there to help you. Becky says: ‘There’s so much innovation that’s happening, with a much better focus on slick customer experience that’ll help you to manage your money better.’ She recommended a couple of new apps to try out this year, including Loot, a money management app which links up with a prepaid debit card and lets you know just how much you’re spending in real time. It can also show users how their spending compares with that of their peers, or those within the same earnings range (which I can’t decide if I’m totally into, but it’s nifty). Loot’s USP is it rewards you with spend-specific vouchers, so you don’t have to give up your fave things in life. Can’t say goodbye to your daily Starbucks? Loot recognises where you’re spending regularly, and rewards you with money-off vouchers for your favourite place. Now that’s technology we’re willing to sign up to. Oh, and it’s also free.
Monzo is similar to Loot - another pre-paid debit card that lets you track your spending in seriously innovative ways. It’s been around for a few years, and it’s currently crowdfunding for donations to get it started out as a real bank. Rebecca tells me: ‘The financial services industry is a bit of a golden circle that nobody can really break into - you need money to do it. Monzo is launching in stages but it’s a really exciting app - definitely one to watch.’ At the moment, you can apply to receive one of their pre-paid debit cards through the app and top up a minimum of £100 to get it posted to you within a couple of weeks. Try it out here.
Tandem is a start-up bank in its very early stages, but it’s another option Rebecca recommends if you’re sick of more traditional banking methods you might be tied down to at the moment. Tandem’s all about building a community of people who want to change the game, to lay the foundations of a better bank for everyone. There’s not a lot of info as yet, but register your interest to get involved here.
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**IFISA is the new way to invest your money
The Innovative Finance ISA is gonna be huge this year - and Rebecca is really excited about it. It’s a form of peer-to-peer lending (no, me neither), which gives you a more attractive return on your money by investing it directly into the UK economy. Small UK businesses are essentially borrowing your cash - using it to help their business grow - before paying it back to you with added interest. It’s not totally risk-free, and it isn’t covered by the FSCS, but it’s a great way to begin investing. You don’t need to take a gamble by investing money you need to keep 100% safe, either: Abundance is a company providing an IFISA with a minimum investment of a fiver. In some cases, you can even choose which businesses you’re investing your money in, something you can’t do with a regular ISA or savings account with a larger bank. Read about the IFISA in more detail on the Good With Money website here. And remember to check that there is a compensation scheme in place, because unlike other financial products, IFISAs aren’t protected by FSCS free and automatically.
***FSCS ****has an easy tool that will help you find out how much money you could save now and for your future. It's completely free and will tell you how you could manage your money better in seconds. FSCS are the people who protect your money for free, from £1 up to £85,000 in UK banks and building societies. *
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This article originally appeared on The Debrief.