I've been out of university for a good few years now, and along the way I've learnt quite a bit about living as an adult with a full-time job — things like "you can probably afford something other than instant noodles now" and "having money is great, but so are the bills and living expenses that come with it." I've also picked up a fair amount about managing money, which at its core is fairly straightforward, even if it's easier said than done.
On a day-to-day basis, it can be hard to see the long-term effects of small and seemingly harmless purchases. What you do today, however, will affect your finances five months from now and thirty years from now — especially as habits form and you think critically about them less and less. The trick is to become aware of the things that affect you financially in the long run, and to get a handle on them before they get a handle on you. There are a few sensible steps you can take towards this.
Step 1: Put your money out of reach
The most obvious thing to acknowledge, and the toughest habit to keep up, is that the best way to save money is to not spend it. The difficulty is that most people assume they can manage this through sheer willpower alone. That generally isn't the case. Even many wealthy people can't readily access the bulk of their wealth — it's tied up in assets and investments, not sitting in a current account.
The most reliable way to keep money is to move it somewhere else as soon as it arrives. If you're on a salary, set up a direct deposit to route a portion straight into investments or a separate savings account, before it ever touches your current account. This is in addition to your pension contributions, which you should be putting in at least enough to get the full employer match — and ideally more than that.
Step 2: Keep an emergency fund
This is sometimes called "de-risking," and it's worth taking seriously. Life has a way of producing unexpected costs — redundancy, illness, an accident with an uninsured driver — and having a buffer makes all the difference. Even if nothing terrible does happen, there's real peace of mind in knowing it's there.
Step 3: Realise that your spending is interchangeable
Once you have your pool of spendable money, the question is simply what to spend it on. Whether it's £150 on a hard drive for your computer or £150 on a round of drinks, you've still spent £150. And if you do both, that's £300. Whatever you choose to buy, it all comes from the same pot. Some budgeting apps split your money into categories, which can be useful, but in reality it's all one amount. The trap to avoid is rationalising one purchase by making another — spending money you didn't quite feel good about, and then spending more to compensate. It sounds absurd when written down, but it's more common than you'd think.
Step 4: Understand how money affects your mental health
Money can be a source of genuine joy, but it's more often a source of stress. Understanding the way it affects you mentally is helpful in changing your relationship with it. More money doesn't automatically mean less stress — more money means more to manage. What tends to reduce financial stress is changing your habits and mindset around money, not simply earning more of it.
As much as possible, automate things. Automate your savings and investments, and keep enough in your account to cover your bills automatically. If the outgoing money takes care of itself, whatever's left is genuinely yours to spend without guilt.
Step 5: Live within your means
It's worth being honest with yourself here. If you're spending more than you earn, you likely already know it. It may be time to let go of a few things that don't really add value to your life. Being able to have the things you actually want in the long run often means saying no to some of the things you want right now — a principle that extends well beyond money.
Step 6: Chip away at your debt
If you've made big purchases over the years — university, furniture, a car or mortgage — you've probably accumulated some debt along the way. The goal isn't necessarily to get to zero; debt is a normal part of modern economies. The key is to make sure it isn't hurting you more than you can manage. If your total debt exceeds your entire net worth, that's worth taking seriously — it may also be a sign that you've been putting money into liabilities rather than assets.
The way to stay in control is to prioritise your cash flow and emergency fund so they can comfortably handle the burden your debt places on them.
Step 7: Focus on growth
This is perhaps the most important step in the long run. Financial growth is about incrementally building your wealth and assets. Progress can seem slow at first, but it compounds — and that compounding effect becomes significant over time. If you invest in stocks or property and reinvest the returns, you'll find that growth builds on itself in a way that's genuinely satisfying to watch.
There's a nuance worth mentioning here. If the growth rate of your investments outpaces the interest rate on your debts, and your cash flow can comfortably service those debts, it can make more sense to invest than to aggressively pay down low-interest debt. If you had £10,000 in debt at 3.5% annual interest and an investment opportunity returning 15% annually, paying off the debt immediately would cost you roughly 11.5% in foregone returns. The maths favours investing — assuming, of course, that you can handle the repayments alongside it.
Conclusion
I hope this is useful. Everyone's situation is different, but taking even a few of these steps tends to have a positive effect — both financially and in how much mental energy money consumes day to day. Small habits, consistently applied, add up to quite a lot over time.