6 tips for managing your finances while working in the UK
Although you may spend most of your time balancing work and play as an expat in the United Kingdom, you need to prioritise managing your finances to avoid money problems you may have now and in the future.
Financial stability affects your overall well-being and quality of life. Without a plan, you may face unexpected monetary difficulties that can cause you stress and anxiety and affect your work and personal life.
Moreover, managing your finances effectively ensures you maximise the unique opportunities that come with working in a different country. Whether you want to send money to India regularly, save for future investments, or travel, having the right money management strategy allows you to make the most of your earnings and expatriate experience.
An effective financial management plan also gives you a safety net against unforeseen circumstances such as medical emergencies, job loss, and other unexpected expenses. It gives you the confidence and security to handle such situations without significantly disrupting your life.
Managing your finances while working in the UK ensures you have a stable and enriching experience that enhances your professional and personal growth and allows you to take care of your loved ones.
Best ways to manage your money as a UK expat
Regardless of how long you’ve already been in the UK and how long you plan to work here, you can always manage your finances more efficiently by following these tips:
1. Create a budget
Living abroad comes with unique and unexpected challenges, which is why you should have a budget to maintain financial stability and security and achieve your goals.
A monthly budget lets you track your income and expenditures, giving you an idea of your financial health. It allows you to allocate funds for your basic needs, including housing, food, and transportation. It also helps you set aside money for savings, investments, further education, and unexpected expenses.
Additionally, a budget lets you identify areas where you can cut costs, enabling you to live within your means and avoid overspending.
- Start by listing your income and fixed expenditures, including your rent or mortgage and transportation or petrol costs.
- Make a list of your varying expenses, such as groceries, healthcare needs, entertainment, and remittance.
- Deduct your total expenses from your income to establish your disposable income.
Review and adjust your budget regularly to adapt to any changes in your financial situation.
2. Maintain a local savings account
With a local bank account, you’ll have a safe and secure place where you can save money for your personal savings and emergency funds. It also allows your money to earn interest, which you won’t get if you simply stash your cash in a drawer at home.
Moreover, a local savings account makes it easy for you to track your daily expenses, pay bills, and make other transactions, simplifying your financial management strategy.
An active local bank account offers access to various financial services and products you may need. It can improve your creditworthiness in a new country, making it easier to get a credit card or loan.
You can use the bank account issued by your employer for payroll to save money. However, consider opening a separate account purely for your savings to ensure you set aside funds for your future and emergency purposes.
3. Keep a bank account in your home country
If you have a bank account in your home country, avoid closing it so you can transfer your extra money to this account and have another savings fund.
Maintaining a local bank account allows you to pay any bills you may have left behind. You can also use this fund when you go home for a vacation, apply for a loan or any emergency.
However, if you cannot maintain the account and the bank is charging you unreasonable fees, you can close it since keeping it may be more expensive.
4. Choose a safe, reliable and cost-effective way to send remittances
If you transfer money overseas regularly to support your loved ones in your home country or send money to your bank account, find a reputable online money transfer service provider.
Reliable money transfer service providers ensure you send money safely to Bangladesh. Moreover, these companies offer affordable charges and competitive rates, making your transactions more cost-efficient.
A good remittance service provider also offers several ways to send money, including using its app and visiting its branch.
Conversely, these companies offer different methods for your recipient to get your remittance. Your loved ones can receive it through their bank account, mobile money or cash pickup at an authorised remittance centre.
By choosing the right money transfer service provider, you can send money safely and conveniently to Bangladesh anytime without any issues.
5. Set financial goals
Identifying your long-term financial goals gives you a clear direction for your financial planning, helping you stay focused and motivated. Whether you want to save for a house, retirement, or your children’s education, setting these objectives early allows you to develop a strategic approach to managing your finances.
Begin by assessing your current financial situation and identifying your future aspirations. Establish realistic and measurable goals, such as reaching a specific amount of savings or paying off your debts by a specific date.
This clarity can help you prioritise your spending and savings, ensuring you allocate your resources efficiently.
6. Start investing as soon as possible
Investing allows your money to grow, helping you build wealth and reach your long-term financial goals. By allocating a portion of your income to investments, you can earn higher returns than what traditional savings accounts offer.
As an expat, you have access to diverse investment opportunities, including stocks, bonds, mutual funds, and real estate, in your home country and internationally. Study these options and consider your risk tolerance and financial goals to choose the best one for you.
If you find the options confusing, work with a financial advisor who can help you understand and choose the ideal investment opportunities.
With a well-thought-out financial management plan, you can focus on your career, support your family, enjoy your experience in a new country, and ensure you have a financially stable future.
