Money News

There are few people that look forward to and enjoy financial planning, but it is important to help your future self as best as you can. Indeed, recent research shows it is as popular as putting out the bins, but it's also just as crucial.

Spring cleaning

In Lemonade Money's recent 'spring clean' online poll, it was revealed that sorting out personal finances was not even on many people's radars, as only 4% of the 73% who had chosen one major job to do at the start of spring had picked it, compared with 18% who had picked sprucing up the garden and 16% who were planning to de-clutter the house or clean the windows. The only things less popular were re-seeding the lawn and cleaning out the pond (1% each).

In slightly better news, finances didn't come out on top as the most dreaded chore. That honour was reserved for deep cleaning the bathroom, which 36% dreaded the most. In second place came ironing (25%), while sorting out personal finances came joint-third with dusting and putting out the rubbish bins (8% each). Luckily for those who were planning to tackle the garden, this was the least dreaded chore on the list.

Financial dread

So, the above shows that people are reluctant to sort out their finances, and many may not even be aware they need sorting. You may be thinking that if you're not self-employed and therefore probably don't need to file taxes yourself, there's nothing you need to do. However, there are certainly questions worth asking, such as: Have you any savings? If you have a savings account, is the rate competitive enough or could you do better? Could you save on any of your regular outgoings? Have you any outstanding debts? Are you doing all you can to repay your loans?

While everyone's situation is unique, the top financial concern from the survey was not having enough savings to fall back on (24%), followed by not having enough for retirement (20%), not being able to save on a regular basis (18%) and not having enough money to live on each month (16%). These are all valid reasons to take a close look at your finances and try to improve things.

Where to start

But where do you start? More than a third (37%) of respondents struggled to know what to tackle first, with most (37% overall) turning to financial websites for help, and 36% turning to their family or friends first of all. Only 8% thought to go to a financial adviser with their financial concerns.

In general, it's important to tackle debts before you can start to think about savings, and there are plenty of debt charities willing to advise those struggling to stay afloat. If you're not sure what to do, our guides can be a good starting point, particularly our 12 steps to get debt-free.

If debt isn't your concern, but you are finding it hard to form a savings habit, you could start nice and easy with either an easy access account or a regular savings account. The former will give you plenty of access for a rainy-day fund, while the latter will help you save a little bit each month, getting you into the habit. Each type will have different advantages and disadvantages, and you might even decide you want both. Whatever you do, don't forget to compare products on all their features so you can find the perfect Best Buy for your needs.

We're often told of the importance of saving for the future, yet it seems that today's younger generation may not be taking it on board, with research from VoucherCodes showing that millennials are choosing to spend their disposable income on the here and now rather than saving up for bigger life purchases.

The research found that those aged 18-34 put just 9% of their monthly disposable income away for future savings, with 29% claiming that they prefer spending their money on 'enjoying the moment' instead.

For many, it's all about experiences, with almost half (46%) of those surveyed saying they prioritise spending on brunch or dinners out, while 29% choose to spend their disposable income on travel. This is far beyond the typical idea of the boozy millennial, with this generation spending just £37 a month on nightlife, compared with £76 per month on eating out and £63 per month on travel.

Even a weekend of home improvement beats a night out on the town, with the typical millennial spending £56 each month on DIY, gardening and homeware-related purchases. Clothes are also high on the list of spending priorities (£71/month), with other must-have expenditure including streaming services such as Netflix (£30), beauty products and treatments (£29), entertainment (£29) and mobile apps (£28).

"Daunting mortgage rates and rising house prices seem to have prompted young Brits into enjoying their money rather than worrying about what they can't afford," said Anita Naik, Consumer Editor at VoucherCodes. However, this desire to live for today means that most aren't thinking about tomorrow, with only 21% saying they enjoy spending money on things to set themselves up for the future.

Indeed, another 21% believe that they'll never be able to buy a property of their own, and just 4% expect to do so in the next five years, perhaps highlighting that they see no point in saving for the future when they could enjoy their cash today instead.

Yet that doesn't mean they're not making sacrifices to fund their instagrammable lifestyles, with 86% saying they've traded other luxuries to make up for their spending. Four in 10 live with their parents to cut back on rent, while 34% walk or cycle to work to reduce transport costs – but what if those cutbacks were put towards the future instead?

By putting that extra money into a savings account that's dedicated to the future, rather than spending it all on the present, it wouldn't take long to build a suitable fund that could be put towards a house deposit, or even to save for retirement if you're thinking really far ahead. This is where the Lifetime ISA could come in, which is specifically designed to save for a first home or pension, and could therefore be ideal for the millennial age.

It may seem like an insurmountable task, and of course everyone wants to enjoy themselves while they're young, but a bit of foresight can go a long way to ensuring that you're ready for the future as well as enjoying today.

Cash has long been king when it comes to payment methods, but new figures from UK Finance suggest that its crown may be starting to slip – and it's largely expected to fall further in the years ahead.

Cash strapped

The figures show that the number of cash payments fell by 11% between 2015 and 2016, with consumers and businesses making 15.4 billion cash payments in 2016, down from 17.2 billion in 2015. Despite this, cash remains the most frequently-used payment method in the UK – it was used 25% more often than debit cards, the second most frequently-used method with 11.6 billion transactions.

Even so, cash accounted for 44% of all payments made by consumers over the 12-month period, marking the second year in a row where consumers used cash for fewer than 50% of all payments. The value of that spending is also dropping, with cash payments totalling £240 billion, accounting for 15% of the total value of consumer spending, a decline of 5% year-on-year.

Cash usage is expected to fall even further over the next decade, with the number of cash payments forecast to fall by 43% to 8.7 billion in 2026, and the total value of those payments predicted to fall by 23% to £185 billion.

Contactless revolution

Much of the shift away from cash is thought to be driven by the rise of contactless technology, with more and more people migrating to this convenient method of payment. Still, 26% of consumer cash payments last year were for a value of £1 or less, and 61% were for £5 or less, so it's clear that people still like using up their small change at the till.

However, cards are increasingly being used to make low-value payments, too, so much so that there were 2.9 million consumers who rarely used cash in 2016, equating to around 6% of the UK's adult population. This trend is particularly prevalent among younger consumers, with more than one in 10 of those aged 25-34 making just one cash payment each month, or no cash payments at all.

At the other end of the scale, 2.7 million people (or 5% of the adult population)
relied almost entirely on cash to make their everyday payments last year, so it's clear that for many, cash has kept its crown.

"It is clear that over the past few years we have witnessed a significant shift away from cash use in this country, with contactless cards undoubtedly causing a decrease in the use of notes and coins," said Adrian Buckle, chief economist at UK Finance.

"However, we don't believe that the UK is on the verge of becoming cashless, as some reports have claimed. People will always want to choose the payment methods that best suit them and, for the foreseeable future, in lots of cases that will continue to be cash."

What next?

Make the most of your payment method, no matter which one you choose. If you're focusing on cash, why not get the best savings account to boost your spending power? Alternatively, if you prefer card payments, make sure you've got the best current account (and debit card) possible, or consider a cashback credit card to get more from your spending. Just make sure your credit score is as good as it can be, and that you can pay the balance off in full each month.

Going to university can be an exciting time, but it can also be an expensive one. After all, for many students, they'll be in charge of their own finances for the first time, which is a learning curve in itself! Knowing how to make your money go further can be one of the biggest challenges of student life, so here are a few top money saving tips to help you do just that.