Money Management

We're here to help you to improve your everyday spending habits and enjoy a healthier relationship with your money.

Improving your money management skills can help you to keep track of how much you're spending and avoid getting into unnecessary debt.

We all face times in our lives when we have to deal with unexpected costs or a loss of income. Causes for this might include redundancy, a long-term illness or an increase in household bills.

Money management can help you to cope with these changes and create a budget that involves regularly putting money aside for a rainy day. We call this building up your financial resilience.

Three steps to improving your money management

1. Know how much money you have coming in

It might sound obvious, but the first step in creating a budget is to understand exactly how much money you have coming in each week or month. Plus, any other regular income such as any benefits you might be getting.

If you have a joint income, include theirs too.

2. Work out your monthly spending

Your monthly spending should be separated into two groups - needs and wants.

Needs include things like rent or mortgage payments, groceries, energy bills, travel costs and childcare.

Wants might include the cost of a night out, a new outfit or something nice for the house.

Budgeting is not about denying yourself the occasional treat. But it helps you to identify areas where you might be overspending and could make cut backs.

3. Create your monthly budget

Once you have a clear picture of how much money is going in and out of your account each month, you can work out the difference between the two.

You might find it useful to apply the 50:30:20 rule to help create your budget.

According to this technique, 50% of your income should be spent on your needs, 30% can be spent on your wants and 20% should be left over for savings or repaying any outstanding debts.

You may find sticking to your budget easier if you follow a few simple rules:

put time aside each month to check your spending. No two months are the same, so you can feel more confident about your overall spending habits if you review your progress regularly
where possible, get the whole household involved with budgeting. This helps to make sure everyone is working towards the same goals
you can also do this exercise with your children to help them develop basic money management skills.

Tools you can use

At first direct we offer a range of free tools to help you to build your confidence in money management.

Spending insights

Our spending insights tool is available in the first direct App to help you to get a clearer view of exactly where your money goes each month.

View spending insights

Online webinars

Our colleagues at HSBC run a regular series of free online webinars to give customers the insights they need to budget more effectively and meet their financial goals.

If you want to chat about your spending, we're on hand to listen and support.

At first direct we have dedicated teams to discuss all things money.

Visit our Dealing with financial difficulty page for more information on how to get in touch.

Creating a savings plan

Starting a savings habit, even if it’s a really small amount, is a good step towards having a positive relationship with your finances.

Finding the right savings account for you

Ready to open a savings account? Take a look at our comparison tool to find the best account to match your saving style.

Compare savings accounts

Guide to building an emergency fund

Whether you’ve got unexpected bills to pay or your car has broken down, having an emergency fund can be pretty handy.

How to build an emergency fund

10 tips to make your money go further

We've put together a list of savings tips to help your bank balance look better this year.

View our savings tips

Regular overdraft use FAQs

What does ‘regular overdraft use’ mean?

I’ve been using my overdraft regularly for a while – why is it an issue now?

As a responsible lender we often review overdraft limits to make sure they’re still what you need. Overdrafts are made for short-term borrowing and so generally have higher interest rates than longer term borrowing products, such as a Personal Loan.

If you’re using your overdraft regularly this could be costly. We’ll get in touch with you to discuss these costs and how you might be able to avoid or reduce them. We’ll also share alternative options to an overdraft that might be worth considering.

What happens if I use my overdraft regularly?

If we notice you’re using your overdraft regularly we’ll write to you and let you know, as well as offering some tips on how to reduce your use.

We’ll take another look at your account to see if you’ve been able to reduce your overdraft use, and if not, we’ll be in touch again.

If you’re still unable to reduce your overdraft use it may be that you’re experiencing some financial difficulty. It’s really important that you don’t ignore the letters and call us as soon as possible on 03455 873 951

Lines are open Monday to Sunday from 9am to 5.30pm.

These situations often don’t go away on their own and we may consider making changes. This could include changing your overdraft limit. We’ll get in touch to let you know what we need to do to help you reduce your borrowing.

How can I reduce my overdraft use?

Here are some practical things you can do to help reduce your overdraft use and monthly outgoings:

budget: know exactly where you are financially by listing your income and outgoings, and regularly checking your balance
set a spending target: even a small reduction in overdraft interest will save you money over time
check your bills: shop around and make sure you’re not paying more than you should
cut back: are there any non-essentials you can reduce or stop?
check your interest: you can view your monthly statement and pre-notification of charges, and use our overdraft cost calculator – you may be surprised how much it adds up over time
use your savings: (if you have some) overdraft interest is generally much higher than the interest you earn on savings – it’s a no-brainer
explore cheaper alternatives: depending on how you use your overdraft there might be cheaper ways to borrow over a longer term.
chip away at your overdraft: pay whatever you can afford – even small amounts add up over time
reduce your limit: reducing your limit bit-by-bit can reduce the likelihood of falling back into your overdraft.

Where can I get help if I'm worried about my finances?

Debt can be worrying and paying off your overdraft can be tough – but there is help and support available. We’ve got lots more information about managing your finances and you can also get free independent advice from:

StepChange Debt Charity

Money Helper

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National Debtline

Citizens Advice

Money Management

Why is money management important?