Don’t sweat the numbers (too much)

As a private investor up against paid professionals, it’s easy to assume you must perform a huge array of financial calculations to match their performance. Munger thinks otherwise. In his view, “people calculate too much and think too little.“

For Munger, finding a great business is as much about looking at it from a qualitative perspective as it is about the numbers. Why might the company rise above the competition? What’s the CEO’s plan to grow the company over the next five years? What are its biggest threats?

Taking a holistic approach will allow you to see things ratio-obsessed analysts might miss. 

Dump the rubbish

Successful investing takes time and energy. We’ve finite amounts of both. Knowing this, Munger advocates being ruthless when looking for opportunities. “We have three baskets for investing: yes, no, and too tough to understand,” he’s said.

Linking in with Buffett’s idea of finding your circle of competence and staying there, Munger is quick to disregard weak businesses, or those whose models are overly complex.

On an anecdotal note, this is why I tend to give banking stocks a wide berth. For me, the potential profits aren’t worth the hassle of wadding through convoluted financial statements. Put, say, a video game developer in front of me, however, and I’m more interested. Here, the business model and financial statements are relatively easy to comprehend.

Many of the UK’s best fund managers use a similar strategy to Munger. Despite the many thousands of stocks available to him, Terry Smith says his investable universe is restricted to around 80 stocks. Even then, only 30 or so make it into the highly successful Fundsmith Equity Fund. Buy the best, discard the rest.

Be patient

One of the key tenets of Munger’s philosophy is only investing in things you can commit to for the long term. For him, “the big money is not in the buying and the selling, but in the waiting.“

Unfortunately, this is easier said than done. Thanks to online share-dealing, we’re able to pick up and jettison stocks on a whim, sometimes paying no commission. Add in a significant global event like the coronavirus pandemic and looking beyond the next few months is even tougher.

Learn to master your desire for immediate results and reap the rewards later down the line.

Question everything 

It’s remarkably easy to fall in love with a stock, especially when it’s one that’s already making you money. Take a look at the excitement surrounding market darling Tesla, for example. 

Munger, however, suggests investors remain vigilant and continually question their holdings. “You must force yourself to consider opposing arguments. Especially when they challenge your best-loved ideas.”

Fail to do as Munger advises and you open yourself up to confirmation bias — only searching for evidence that supports your thesis. 

There’s nothing wrong with being confident in your stock picks, of course. Just be willing to change your mind — and your portfolio — if the facts change.

The post Have money to invest? I’d follow Charlie Munger’s top tips to get rich appeared first on The Twelfth Magpie.

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• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Paul Summers owns shares in Fundsmith Equity Fund. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Today, however, I’m picking out 10 top-tier stocks that I’d feel comfortable buying now and holding until 2030.

Defensive demons

Although the near-term may present challenges to even the most resilient, globally-diversified companies, firms such as Unilever and Diageo should emerge relatively unscathed. 

Even if the panic-buying witnessed over the last few weeks is (thankfully) unlikely to last, it’s clear that consumers will continue to prioritise spending on food and household items for the foreseeable future.

With a portfolio bursting with brands such as Persil and Dove, that should keep earnings relatively steady at Unilever.

The same goes for Diageo. Despite the enforced closure of pubs and bars, there will still be plenty of drinking going on at home. And when this is all over, the desire to socialise over a beverage or two will surely return in force.

Power provider National Grid is another stock I’d consider buying. As dull as utility stocks are, they do have a habit of holding their own during troubled times. They’re also a fairly safe choice for income hunters. Right now, the Grid yields 5.4%.

Healthcare heroes

Aside from those with great brands, there are other stocks — most notably related to healthcare, safety or hygiene — that could make great investments over the short and long term.

With its 5.4% dividend yield, GlaxoSmithKline would be my preferred pick in the pharmaceutical space. Medical devices manufacturer Smith & Nephew looks good too, especially as it only revealed market-beating revenue and profits back in February. The hip and knee implant maker might also be a good play on the longer-term ‘ageing populations’ theme.

Despite their still-frothy price tags, safety product maker Halma and pest control firm Rentokil Initial would likely make the cut too. I can’t see demand for any of their services drying up. Indeed, I think it will be the opposite!

High quality

My remaining picks are more cyclical. However, what they may lack in traditional defensiveness, they more than make up for in quality. Again, adopting a long-term perspective is vital here.

Like nearly all retailers, 164-year-old luxury brand Burberry has been forced to close stores across the world. Once the coronavirus has passed, however, I suspect its products will be as much in demand as ever, particularly in Asia. It may even become a takeover target. In the meantime, the company’s financials look robust, at least relative to sector peers.

While the extent to which the crisis will impact the UK housing market is unclear, I’d be eyeing up property portal Rightmove as well. Perpetually prohibitively expensive, the £4bn cap generates unparalleled returns on the money it invests. It’s also succeeded in protecting its massive market share for many years.

My final pick is not a single company stock at all. Tech-focused Scottish Mortgage Investment Trust gives exposure to high-growth giants such as US giants Amazon and Tesla.

Although the sector is prone to hype, the returns made by the trust over the last 10 years have been superb and far above that generated by the FTSE 100 (indicating that the trust’s managers are assured stock-pickers). As an existing holder, I’m hoping this will continue for the next 10 years.

The post Have cash to invest? Here are 10 FTSE 100 stocks I’d buy and hold for the next decade appeared first on The Twelfth Magpie.

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• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Paul Summers owns shares of Burberry and Scottish Mortgage Investment Trust. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended Burberry, Diageo, Halma, and Rightmove. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Save money by paying yourself first

Many people in their 20s struggle to save money. The reason? There’s no money left to save at the end of the month. Once they’ve paid their rent, bills, and transport, bought some new clothes and enjoyed a few nights out, there’s nothing left over.

The solution to this problem? Get into the habit of paying yourself first – it makes saving much easier. As soon as you receive your salary, redirect a proportion of it (aim for 10%+) into another account. Then, you can spend the rest guilt-free. The chances are, you won’t even miss that 10% but your savings will grow substantially over time.

Build an emergency fund

Once you’ve begun saving, focus on building up an ‘emergency fund’. This is a stash of money that provides financial security and will protect you against financial shocks such as losing your job or being hit with a large unexpected dentist bill. In terms of how much to save here, most experts agree that your emergency fund should be large enough to cover at least three months’ worth of expenses.

Open a tax-efficient account

If you’re saving for long-term goals, it can be a smart idea to open a tax-efficient account. This way, you’ll protect your gains from the taxman. One good option is the Stocks & Shares ISA. With this account, you can invest up to £20,000 per year and access your money whenever you want. Another account to consider is the Lifetime ISA. This one, which has an annual allowance of £4,000, comes with 25% bonuses from the government, however, you can’t touch the money until you turn 60 or buy your first home.

Think about retirement saving now

Your 20s is also a good time to start thinking about saving for retirement, believe it or not. Retirement may still be 40 years off, however, if you start saving a little bit now, by the time you retire, that money will have grown significantly due to the power of compounding (earning interest on your interest). If you leave retirement saving late, as most people do, you’ll have to save a huge amount later in life to be able to live comfortably in retirement.

Build your wealth by buying assets

Finally, your 20s is a great time to start accumulating assets in order to build your wealth. Assets are things that make you wealthier over time. For example, a stock that pays you a regular cash dividend is an asset. Every time you receive a dividend, you’re a little bit wealthier. Similarly, an investment fund like Fundsmith is an asset.

By contrast, liabilities reduce your wealth. A good example is a sports car. To keep that car running, you’ll need to pay for fuel, insurance, and regular servicing. Over time, that car will make you poorer.

If you can grasp this concept early on, and you focus on buying assets such as stocks and funds instead of liabilities, it will make a huge difference to your wealth over time.

The post In your 20s? Here are 5 top money tips that could boost your wealth by thousands appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Edward Sheldon has a position in Fundsmith Equity fund. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, if you’re struggling to save, there are a number of simple strategies that could help you become a better saver. Here, I look at three straightforward savings techniques that could help you put away a little bit more for the future.

The ‘pay yourself first’ technique

This strategy – which is often recommended by financial experts – involves saving a little bit of your income as soon as you receive your pay cheque, instead of waiting until the end of the month to save.

The reason this strategy works is it forces you to be disciplined with your money. If you don’t pay yourself first, it’s all too easy to blow your entire pay packet and have nothing left over at the end of the month. However, if you do pay yourself first, saving becomes a priority.

The ‘1p-per-day’ strategy

If you want to start small, the 1p-per-day strategy could be worth trying. The way this works is that on the first day, you save 1p. Then, for every day going forward you save an additional 1p. So, on day two, you’ll save 2p and day three you’ll save 3p etc.

The beauty of this strategy is that your savings can really add up over time even though you have started with small change. If you save every day, by the end of the year you’ll have a pot of £667.95.

The ’round-up’ strategy

Finally, you could also consider the round-up strategy. This is where you save your change after every purchase. For instance, if you buy a coffee for £1.80, you then save 20p.

These days, this strategy is really easy to execute as a number of apps such as Moneybox can do all the hard work for you and redirect your change automatically. For those who struggle to save, this could be a good option.

What to do with the money

Of course, in the current financial environment, saving is only half the battle. If you want to build  your wealth, you need to get that money working for you. If it’s sitting in a cash savings account earning 1.5%, it’s essentially losing value over time, due to inflation.

This is where growth assets such as shares and investment funds come into play. With these kinds of assets, you can expect average returns of around 6-10% per year over the long run. If your money is growing at that kind of rate it could make a big difference to your wealth over time.

For example, if you have £5,000 saved now, and you leave this money in a cash savings account earning 1.5% for 10 years, it will only grow to around £5,800. However, if you put that £5,000 into a diversified portfolio of growth assets and achieve a return of 8% on your money, it will grow to around £10,800. That’s a big difference.

So, while saving is crucial, it’s important to realise investing is the real key to building wealth. And if you’re looking to learn more about investing and how it can boost your savings, you’ve come to the right place…

The post 3 easy ways to save more money in 2019 appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The good news is it’s never been easier to do so. Here’s a look at three good ways to pick up some extra income today.

The internet

Technology has come a long way over the last decade and there is now a broad range of innovative websites that enable those in the UK to generate some extra money without a lot of effort. Here are a few examples:

• Airbnb: allows you to rent out your house or a spare room

• Drivy: enables you to rent out your car when you don’t need it

• Fat Llama: allows you to rent out just about anything including bikes, tools, sporting equipment, cameras, and musical instruments

• Your Parking Space: enables you to rent out your parking space

• eBay: allows you to sell things you no longer need

These are just a few examples, but you get the idea. If you’re willing to use your initiative, there’s a ton of money to be made online.

Part-time work

It’s also never been easier to pick up some (enjoyable) part-time work if you have some spare time. For example, if you enjoy writing, there are plenty of websites such as Upwork, Peopleperhour, and Freelancer which could help you bring in some extra cash. The demand for content these days is enormous.

Enjoy driving? You could sign up with Uber and become a taxi driver in your spare time. Love dogs? With DogBuddy you make a £1,500 a month looking after them. If gardening or handyman work is your speciality, Task Rabbit may have a job for you. Again, with a little bit of initiative, you could make a small fortune.

Dividend stocks

Finally, one really easy to way to generate some passive income (and one that I’m a big fan of myself) is investing in dividend stocks. These are stocks that pay out a proportion of their profits, in cash, to shareholders on a regular basis.

Right now, it’s super easy to build a solid income stream with dividend stocks as the dividend yields on a lot of FTSE 100 stocks are high. For example, Lloyds shares currently offer a forward-looking dividend yield of 5.6%, meaning that a £1,000 investment could bring in around £56 in cash every year. Similarly, oil giant Royal Dutch Shell currently offers a dividend yield of 5.8%, meaning a £1,000 investment could bring in nearly £60 cash per year.

Of course, it’s important to be aware of the risks here. Stocks rise and fall in value, meaning you might not get back what you put in. Dividends are also not guaranteed. However, when you consider how easy it is to build up a passive income stream through dividend stocks, I think they are definitely worth considering if you’re looking for extra money.

The post 3 ridiculously easy ways to make some extra money today appeared first on The Twelfth Magpie.

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• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Edward Sheldon owns shares in Lloyds Banking Group and Royal Dutch Shell. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

There are a number of reasons why investing rates are so low across the country. And one explanation that we often hear from those who are not doing it is that they believe that they don’t actually earn enough money to save and invest. They think investing is for the wealthy, and only possible on a six-figure salary.

I want to dispel that particular myth and I’m going to explain how it’s possible to start investing with an upfront sum of just £100 and then less than £6 per week.

£5.77 per week

If you think you need to be earning an enormous salary to start investing, you’d be wrong. Due to advances in technology, investing has changed a lot in the last 15 years or so, and it’s now possible to get started in the investing space with very small amounts of money.

For example, at Hargreaves Lansdown – the UK’s largest investment platform – you can put your money in a fund (a portfolio of many companies that is run by a fund manager) with a lump sum of just £100. It’s also possible to set up a monthly direct debit to contribute to your investment from as little as £25 per month, which equates to around £5.77 per week – roughly the price of a sandwich and a coffee.

Investments can grow quickly 

Could this make a difference to your finances over time? Absolutely – you’d be surprised just how quickly a small investment can grow. For example, assuming a growth rate of 8% per year (which is roughly the rate that the stock market returns on average over the long run) a £100 initial investment and a £25 monthly top-up could grow to around £2,000 after just five years, according to my calculations. Not a bad result from an outlay of just over a fiver a week! Boost the monthly direct debit to the equivalent of £10 a week, and you could be looking at an investment value of nearly £3,500 after five years.

The bottom line 

The bottom line, when it comes to investing, is that you don’t have to be earning a huge salary, or have a considerable cash sum set aside to get started. The investing landscape has changed dramatically in recent years and today, it’s possible to set up an investment account, and begin building up your investment, with a very small amount of money. That money will grow even if you can’t afford to increase the weekly amounts by much in the future. 

Could you spare £5.77 per week to set yourself up financially for the future?

The post Think you don’t earn enough to save and invest? Read this now appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Bank accounts

One approach is to take advantage of bank accounts that offer higher interest rates on smaller sums of money.

For example, Tesco Bank’s current account currently pays 3% on savings up to £3,000, as long as you pay in £750 per month and make three direct debits. Each individual can have two of these accounts, meaning that a couple could potentially earn 3% on £12,000 (4 x £3,000), which equates to £360 interest per year.

Other accounts that could be worth a look include the TSB Classic account, which pays 5% on up to £1,500, and the Nationwide FlexDirect which pays 5% fixed for a year on up to £2,500, although both have conditions.

Fixed-term savings

If you don’t need access to your money in the short term, another easy way to pick up a higher interest rate is to invest your cash in a ‘fixed-rate’ savings account for a certain period of time. For example, the Post Office is currently offering a rate of 1.9% on its one-year fixed-term savings account. 

While the rates on two-year and five-year products are higher than one-year options, I wouldn’t recommend locking money away for longer than a year, as UK interest rates could rise in the future, meaning that interest rates on savings accounts could improve too.

Peer-to-peer lending

If you’re keen to earn a higher rate than 3% on your money, consider peer-to-peer (P2P) lending. This is where you lend your money to other people, or businesses, through a P2P platform. Through popular UK platforms such as Zopa, Funding Circle, and Ratesetter it’s not hard to earn rates of 4% or higher. Having said that, it’s important to note that P2P lending is riskier than putting your money in a bank account. Borrowers can struggle with repayments meaning you might not get back all of your money. Furthermore, given that P2P lending is a relatively new industry, we don’t know how it will perform if the economy collapses. So it’s worth proceeding with caution here – it’s probably not wise to put your entire life savings into P2P lending.

Dividend stocks

Finally, if you’re serious about increasing your savings, consider investing some money in dividend stocks. These are companies that pay shareholders regular cash payments out of their profits several times a year. Right now, there are some fantastic yields on offer from some of the UK’s largest companies, such as 6% from Shell, 6% from HSBC and 8% from British American Tobacco. With these kinds of stocks, it not hard to start building up a passive income stream. 

Of course, stocks are riskier than cash and in the short term, share prices can be volatile, meaning you might not get back what you invested. However, research has shown that over the long term, stocks tend to generate returns of around 7%-10% per year on average, which is far higher than the returns from cash savings in the current low-interest-rate environment. 

The post 4 ways to increase your savings in 2019 appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Edward Sheldon owns shares in Royal Dutch Shell. The Motley Fool UK has recommended HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Here’s a look at three smart things you could do to really make the most of that cash.

Open a Lifetime ISA

If you’re aged between 18 and 39, it could be worth putting that £1,000 into a Lifetime ISA. Why? Because the government will hand you a 25% bonus on your cash, taking your savings to £1,250 almost instantly.

Of course, there is a catch, and the conditions are that the money must be kept in the Lifetime ISA until you use the funds to buy your first property or you turn 60. A little inflexible, sure, but possibly also worth it if you’re saving for your first property or looking to turbo-charge your retirement savings over the long term.

Buy a mutual fund

Mutual funds can be a great way of investing in a stock market if you don’t know much about investing. With this kind of fund, your money is pooled together with the money of thousands of other investors and then managed by a professional fund manager.

There are all kinds of mutual funds available, ranging from basic funds that invest in well-known UK companies, to more specialised ones that invest internationally or in niche areas such as technology. If you’re looking for ideas, it’s worth checking out the list of most popular funds on Hargreaves Lansdown to see where other investors are investing their money.

Two funds on the most popular list that I hold in high regard include the Lindsell Train UK Equity fund, which invests in a selection of high-quality UK stocks, and the Fundsmith Equity fund, which invests in a selection of international stocks. Over the last five years, these funds have generated amazing returns of 88% and 156% for investors respectively, although past performance is no guarantee of future performance.

Buy a dividend stock

Another option, if you’re feeling adventurous, is to pick stocks yourself and buy a dividend stock. The advantage of these is that they pay you cash every year for doing absolutely nothing. Build up a portfolio of dividend stocks, and you could create a nice little second income stream for yourself.

The UK is home to a number of stocks that pay high dividends, with plenty of companies offering yields of 5% or higher. For example, oil giant Royal Dutch Shell currently has a dividend yield of 5.2%. That means that if you were to invest £1,000 in the company, you’d receive a cash payment of £52 per year, assuming the dividend and exchange rates are held constant. Of course, shares are riskier than cash savings and it’s important to realise that the value of your investment could fall.

When you find yourself with a little bit of excess cash it can be tempting to spend that money immediately. However, think long term, and you could use that money to potentially set yourself up for life.

The post 3 smart things you could do with £1,000 right now appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Edward Sheldon owns shares in Royal Dutch Shell. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Today, I’m looking at two basic mistakes that millions of people across the UK are currently making. Both can have a devastating impact on long-term wealth creation. Are you making these crucial mistakes with your hard-earned cash?

You’re struggling with credit card debt

Are you struggling with credit card debt? If yes, you’re not alone. According to statistics from The Money Charity, in April, total credit card debt across the UK in April came to a colossal £71bn. That equates to around £2,600 per household which is a concerning level of debt when you consider the average wage.

Credit card debt (or any other high-interest debt for that matter) is your number one enemy when it comes to building wealth. Speak to any reputable financial adviser and they’ll almost certainly advise you that one of the first things you should do if you want to get your finances into shape is pay off your credit card debt as soon as possible.

The problem with credit card debt is the sky-high interest rates that lenders charge on your outstanding balance. For example, plenty of UK credit cards have interest rates of 20% or higher. At that rate, if you rack up £10,000 spending on your card, you’re looking at interest payments alone of £2,000 per year. In contrast, average interest rates on savings accounts are around 1%, meaning that £10,000 of savings would generate interest of just £100 per year. Can you see the problem here?

If you’re struggling with credit card debt, put a plan in place immediately to pay it off as soon as possible. Don’t hesitate to seek help if you need it. 

You don’t have an emergency fund

Do you have some savings set aside for emergencies? Many people don’t. According to Skipton’s research, a quarter of British adults have no savings at all. Again, that’s a worrying statistic.

Having an ‘emergency fund’ set up, with some cash savings that are easily accessible, is a very sensible idea when it comes to money management. An emergency fund provides a sense of financial security and will protect you from the financial ‘surprises’ that life tends to throw up. If you lose your job, or you’re hit with an unexpected bill, you won’t be forced to turn to credit cards or, worse still, high-interest ‘payday’ loans to get by.

How much should you save in an emergency fund? Generally speaking, financial experts agree that your emergency fund should be large enough to cover at least three months worth of expenses. So, if you spend £2,000 per month on essential expenses such as rent, food and transport, your emergency fund should be at least £6,000.

Of course, these are just two mistakes that many people tend to make. There are many others. If you’re interested in learning more about how to get your finances in shape, feel free to download our free report below on ‘financial independence.’

The post You’re still making these mistakes with your money, aren’t you? appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Are you concerned that your own money/savings habits are far from perfect? Here’s a look at four warning signs that could mean it’s time to sort your finances out.

You’re constantly in the red

If you’re spending more than you earn, it’s a problem. You can’t possibly hope to enjoy a comfortable future if you’re constantly in the red and relying on credit cards, or worse still, ‘payday’ loans, to get by. Yet, many Britons are in this position.

The key to sorting this out is to draw up a budget and stick to it. List your income in one column and your expenses in another, then look at where you could cut your spending so your outgoings are less than your income.

You’re not paying your credit card off in full

Credit cards can be useful at times. However, they can also literally destroy your wealth, and your future prosperity, if you don’t pay your balance in full each month. With many credit cards having interest rates of 20% or higher, debt can snowball pretty quickly if you’re not careful. If you’re struggling with credit card debt it’s one of the first things you should sort out.

You’re not saving regularly for the future

Regular saving is one of the most effective ways of building long-term wealth. Yet millions of people across the nation are not saving regularly. For example, in the 2016/2017 financial year, just 17% of the population put money into an ISA. That’s a staggeringly low percentage.

Why are people not saving? Looking at Skipton’s research, a third of people blamed their lack of savings on the fact their monthly outgoings were so high that they never had anything left over to save at the end of the month.

There’s a little trick that can help you here. The key is to pay yourself first. No matter whether your monthly salary is £1,000, £2,000, or £5,000, as soon as you receive your pay cheque, put a portion of it (ideally 10% or more) into your savings. Then go about paying your bills and living your life with what’s left. The chances are you won’t even miss that money you’ve put away, but your savings will grow substantially over time in the background.

You have no savings at all

What’s worse than not regularly saving? Having no savings at all. Apparently, 25% of Britons have zero savings, according to Skipton. And 10% of British adults over the age of 55 don’t have a single penny put away for their future. Grim statistics, indeed. A lot of people are going to get a shock when they reach retirement age and have to rely on low State Pension payouts.

If your financial habits are questionable, it’s probably a sensible idea to do something about it… sooner rather than later. Put a plan in place now and you may be able to turn things around before it’s too late. If you’re looking for some tips, check out our free report below on ‘financial independence’.

The post 10% of Britons admit to being ‘terrible’ with money. Are you? appeared first on The Twelfth Magpie.

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