Why are some people just good with money?

Learn new ways to save money with help from Simple Fast Loans!


We all know that person who is just good with money. They are careful what they spend, actually have savings, never seem to worry about debts or have the embarrassment of a card being declined, and yet somehow manage to buy everything they need.

How do they do it? 

There are a few basic habits that underpin being good with money. The good news is that it is never too late to start learning them and improving your financial situation.

In this article we look at five habits that you can learn to help you start being good with money.


Habit 1: Have a monthly budget

At this point, your instinct may well be to stop reading this article now and just accept that you will never be good with money. There is something about the word budget that can make us panic!

But it really is the best way to get on top of your finances.

If you struggle to get to the end of each month, and just seem to be sliding further and further into debt, you need to work out what is going wrong and take steps to change that.

So make a list of everything you think you spend each month. Whether you do this on paper or a computer spreadsheet is up to you. There are also many budgeting apps around, such as Money Dashboard, Wally or Emma, some of which you can then use to link to bank accounts for real time money tracking. But the important thing right now is to make a start.

You need to include all your expenditure. This will include fixed costs (eg mortgage/rent, some household bills, subscriptions etc) and variable costs: things that you spend money on day to day.

A typical list of expenditure might be:

  • Mortgage/rent
  • Household bills
  • Phones
  • Insurance
  • Loans/credit card payments
  • Food
  • Car
  • Other transport costs
  • Childcare
  • Pets
  • Subscriptions
  • Sports/gyms
  • Personal care (eg hairdresser)
  • Clothes
  • Socialising
  • Savings

If you do this, you should have a reasonable idea of what you are spending. But preparing a budget is one thing: testing it out in reality is where things start to get interesting . . . 


Habit 2 : Track your spending

For at least a month, ideally longer, compare what you think you are spending with what you are actually spending, This really is the key to successful budgeting, particularly with regard to variable costs. You may think you spend a certain amount on food each month, or socialising, or clothes. But you could be horrified to see how much more you actually do spend on these items than you think.

So track your spending carefully, using either a notebook or spreadsheet or app. Include everything. It all adds up.

After a month or two, you should be able to see where the money is disappearing to. It’s now time to balance the books.


Habit 3 : Balance the books

So you know where your money goes in a typical month. If you have enough money coming in to pay for everything that’s great news. Skip to Habit 4.

But at this stage many people find that they are consistently spending more money than they have coming in. This is the problem you need to fix. Otherwise your debts will continue to increase and it will be more and more difficult to get on top of things.

Balancing the books simply means that you need to have enough money coming in (income) to cover everything going out (expenditure).

So you need to either increase your income or reduce your expenditure. Ideally both.

Increase your income

Easier said than done, right. But are there ways in which you could try and get a bit more money coming into your household? Admittedly there is no easy fix for this, no magic bullet. Whatever you do is likely to involve time and effort. But if it can turn around your finances, it will be worth it.

  • A new job. Now that the economy is gradually opening up again, is it time to look for a better job opportunity with higher pay?
  • A second job. Would it be possible to take on additional work, even on a temporary basis, to give your finances a boost?
  • Start your own business as a sideline. Is there any skill or talent that you have that might be able to bring in additional income. For example childcare, cleaning, virtual assistance, baking, sewing? 
  • Selling goods online. The online marketplace is booming. Whether you sell goods you create yourself, unwanted items you own, or resell items you source elsewhere, you could make money.
  • Take in a lodger. If you have a spare room in your home, how about renting it out on a permanent or occasional basis? You can find out more details of how to do this on the Gov UK website.

Reduce your expenditure

When you look at your expenditure your initial reaction will most probably be that there is absolutely nothing that you can reduce. But often there is. You just need to look at things carefully and, sometimes, make some tough decisions. The exact solution will depend on your individual circumstances, but a few things to consider may be:

  • Go through every single item of expenditure on your list. If it is not essential then it needs to stop.
  • Contact all your suppliers – eg mobile phone, broadband, energy – to see if you can get a better deal. Or switch suppliers. Comparison sites such as USwitch or Money Supermarket can help you. 
  • Plan your food shopping carefully and economise wherever possible. See our article How to save money on food shopping to help you.
  • Even though Covid restrictions are lifting, try meeting friends in homes as well as going out, as this can work out a lot cheaper.
  • Buy second hand clothes and household goods where possible instead of automatically buying new. There are great bargains to be had on sites like eBay and Facebook Marketplace.
  • Trade favours with friends instead of paying for someone to do things for you. For example, if you know someone with DIY or car maintenance skills, and you are good at hairdressing or gardening, you may be able to come to an arrangement that works for both parties.

By working hard to increase your income and/or reduce your expenditure, you should gradually be able to balance the books and be able to revisit Habit 1 and have a monthly budget that works well for you.


Habit 4 : Crunch your debts

When you are carrying debt it is not only very stressful but you can also get trapped in a vicious circle. You can get more into debt because you are paying off debt. This is particularly the case for unsecured debts such as credit cards. If you are just paying the minimum payment each month you can end up only paying off the interest on the balance you owe, which means that the actual debt goes on and on.

So if you have savings, it is worth using some of them to repay your debts. Once you are free of paying your monthly credit card or other debt repayments, you will then have that money to start saving again.

If you don’t have savings then a good plan is to focus all your efforts into clearing one of your debts. Perhaps either the smallest one or the one with the highest rate of interest. Do whatever it takes. Then once that has been paid off, channel the monthly repayment from that one into the next on your list. And so on. Gradually you will see your debt reduce and will begin to have more financial freedom.

Another option may be to take out a completely new loan to pay off all existing debt completely. You would then have a fresh start and have just one monthly repayment to make, which may be easier to manage. If this option appeals to you then Simple Fast Loans may be able to help.


Habit 5 : Save money

This is the real key to being good with money. If you are able to build up some savings, you will be well prepared for any kind of financial need or emergency. If there are happy events in your life, such as weddings, babies, house moves or any kind of celebrations, there is money there to support you. And when an urgent need arises – a new car, broken appliance, medical care or funeral expenses – you have the funds ready to cope. You won’t need to get into debt at the time when you could well do without it.

So start to save money as soon as you can. If you are starting from nothing, then even putting aside a little each month will get the ball rolling. It’s a good idea to open a new bank account for your savings, ideally one that does not give you instant access to your money. We looked at some places to save money in our recent article I want to save money – but where?

As well as saving a bit each month, try creative ways to save other pockets of money here and there. For example, why not have a cash jar and either put loose change in there at the end of every day, or every time you decide not to buy something (eg a coffee or a magazine) put the money you would have spent into the jar. Then when the jar is full, transfer it to your savings account.

Also, if you receive any unexpected money – for example a gift or a win – put half of that money into your savings account. 

Any amount, large or small, builds your savings that little bit further.


We hope that the above five habits will help you to turn your finances around, and gradually become a person who is just good with money.

Good luck! And check back here soon for more financial and lifestyle tips from Simple Fast Loans.