We all want to earn more money. Given a higher salary, we’d pay off our debts, put more money aside for a rainy day and retirement and generally make life more comfortable, right? Not necessarily. According to one financial guru, thinking that you will start saving when your income is large enough is a “money lie” that most people tell themselves so that they don’t have to start tackling their financial problems right now.

Patrice Washington, the author of the Real Money series of financial advice books, says that the examples of celebrities and sports stars who have made millions only to see their fortunes slip away should show everybody that simply making more money doesn’t mean that people will always make the right choices. She says that how somebody manages £100 will show them how they will handle £100,000. Building wealth and financial security, she says, is more about how much you manage to hold onto rather than how much you earn. Millionaires are just as likely to be up to their eyes in debt as somebody who earns very little.

money management

How to hold onto your money

The first and most important step in building financial security is to actually sit down and plan a course of action right now. Washington advises people who want to change their financial habits not to tell themselves that it will be all right “when they earn more” because it isn’t a date to take action.

Instead, she says, you don’t have to wait until making a New Year resolution or when you get a new job or when you hit a certain age, to start making changes which will lead to financial growth.

Other advisers say that focusing on your needs rather than your wants is the only way to learn how to be responsible with money. Otherwise, they say, when you do land a higher paid job or receive a windfall, the extra cash is likely to fade away just like your pay check does currently. To do this, they advise, allocating a proportion of your income to savings should be classed as a need rather than a “nice to have”. Savings should be a fixed cost every month – built into your monthly budget – and should be prioritised before you start spending money on things designed to cheer you up like eating out, luxury items and new smartphones.

Managing the pennies

A vital step on the path to financial security is to treat every penny that you earn as important. If you aren’t concerned about the pennies that vanish every day, then you won’t be able to keep track of where you are spending money when you are earning thousands of pounds more.

If you are serious about changing your money habits, then you should follow these six steps which will build good financial habits into your daily routines and put you in good stead for later in life:

  1. Track your spending. You should write down every penny you spend for a period of at least one month. After you’ve done this, you’ll be able to build a budget that you can follow month in, month out. Solution Money has put together a budget template which you can easily fill in with your own income and expenses.
  2. Set up a joint account. If you are married or living together, you need to get out of the mindset of “that’s hers” and “this is mine”. All of your income belongs to both of you and so all of it should go into one joint account and then allocated from there. If you have a joint account and approach to tackling your combined expenses, then you’ll both take more responsibility for your financial future.
  3. Get your bills on direct debit. It’s easy to forget to pay a bill on time if you are relying on your memory. Make sure all of your regular outgoings are on direct debit and are clearly listed on your household budget.
  4. Have an emergency fund. Rather than relying on credit cards or loans to deal with the unexpected things in life, learn how to build up an emergency fund to take care of the inevitable crises.
  5. Only withdraw enough cash to cover your daily needs. Don’t go withdrawing large amounts of money from a cashpoint – that’s a sure way for money to disappear. Instead, only take out the amount you’ve allocated for daily needs – like lunch and travel – on your household budget.
  6. Sell things you don’t need. We’ve all got far too much stuff. Sell the things that are up in your attic which you haven’t looked at in years and put the money into your savings or use it to pay off debt.


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