WHAT do your money decisions say about you? Take our quiz to find out how your money mentality can shake your finances.
The questions are from Monzo’s new book – The book of Money which has been written by the bank’s team of experts.
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It’s packed full of top tips on how you can sort out your finances and the answer starts with how you go about managing your money.
Monzo’s chief executive, TS Anil said: “Although money is one of very few universal human experiences, it often makes people feel awkward, anxious and uncomfortable. Just plain bad.
“So bad that a third of 18-to 44- year- olds say they’d rather scrub a toilet than check their savings account.”
In an exclusive extract we reveal some of the most useful strategies from the book to ensure that you too can become a money master.
Money and Me Quiz
I usually make decisions based on:
My budget – a
My mood – b
The ideal of following a monthly budget feels:
Reassuring – a
Restrictive –
Checking my bank account makes me feel:
In control – a
Stressed out – b
Changing my bank to get a better interest rate sounds like:
Something I’d do – a
A lot of effort – b
Paying into a pension is something
I already do – a
I don’t want to think about just yet – b
Tracking and splitting holiday costs with another person makes me feel
Fine – a
A little worried – b
A serious looking letter from my bank arrives, I…
Open it straight away – a
Delay opening it – b
Putting myself in my overdraft to buy me and my dog matching jumpers sounds like…
A terrible idea – a
Fun – b
Conclusion
If you answered mostly a), you tend to make money decisions based on facts, not feelings.
You probably have a budget, a plan and a back-up plan for the back-up plan.
You’re on the right track, but don’t forget, it’s OK to treat yourself now and then.
If you answered mostly b), you go with your gut and live for quick wins.
When things are working out, this feels great, but it can mean you’re not thinking ahead.
Luckily, a bit of planning can make those splurges feel less risky.
If you answered a mix of the two, you might change your approach based on what’s going on in your life.
Or perhaps you’re pretty confident with some aspects of money, like your monthly budget, but less sure about others, like interest rates.
Fixing your finances
Here are 14 expert tips to fixing your finances.
Use time to your advantage
Compounding is the hero and inflation is the villain.
Once you understand how those two things can work for or against your money over time, everything else follows.
When you leave your money to grow over time and don’t touch your savings, compounding is the interest you earn on your interest.
Think of it as the financial version of ‘that escalated quickly’.
When you’re saving for the future over a long period of time, this changes everything.
If compounding is your money’s best friend, then inflation is its enemy.
Inflation is the rate at which things increase in price overtime.
It’s why you can buy less with the same amount of money today compared to five years ago.
That means if you let your money sit in an account that doesn’t earn any interest over the years, it’s slowly going to be worthless over time.
Patience over long periods of time is a superpower when it comes to managing your money.
That’s because the longer you give your money to work for you, the bigger the rewards, all thanks to the power of compounding.
Pay yourself first
Pay yourself first’ is the short way of saying: when pay day hits, squirrel away some money into your debt repayments, savings and investments before you buy anything.
This should be the first thing we do, but more often than not, we only save what we have left.
Instead, you should think of your savings as a salary that you pay to your future self.
Starting with even the smallest amount can make a big difference – and most importantly, it will build a habit.
Make this task even easier by automating your savings – set it up once, and you won’t have to think about it.
Make your goals personal
These whys will be the driving force behind every financial decision you make.
Maybe you dream about going on a luxury trip, moving to a brand new city, or simply building up a savings pot.
Whatever it is, having a goal will give your money intention and help you focus on the things that really matter to you.
And writing your goals down (or finding pictures that represent them) can make a huge difference to whether or not you’ll actually achieve them.
Neuroscience shows that when you write down your goals, you’re using both the logical and creative parts of your brain, which boosts your chances of success.
Embrace the envelope method
The envelope method is an old-school way to manage your money.
You label envelopes with categories like rent, food and entertainment, and then stash the cash you’ve budgeted for each inside.
Once the envelope’s empty, that’s it, no more spending on that category.
Today, you can do this digitally using banking apps, by allocating your income to different ‘pots’.
The idea is exactly the same: give every pound a job and keep an eye on where it’s going. Just don’t forget to include an envelope for paying yourself first!
Future-proof your income
Generally speaking, you’ll have money coming in – your income – and money going out – your expenses.
Over time, you’ll also want to keep some of that money aside for savings and investments.
That third category might not always be a priority, like when you’re younger or if you’re focusing on repaying debts, and that’s OK.
You just want to get in the habit of building it up over time, because it’ll help you create financial security for the future.
You can boost how much you put into it by spending less, earning more, or both!
Your income might increase if you get a pay rise, pick up a side hustle as a Vinted mogul, or claim all the benefits you’re entitled to.
Your expenses might decrease if you curb a coffee habit or a child moves out.
Understanding your bank balance
Regularly checking your balance is like going to the gym. Once you get into a good routine, it makes you stronger.
‘Money avoidance’ is a real thing, and it works like this: you feel embarrassed and worried about the state of your finances, so you completely ignore them, and then continue spending (sometimes even more) to trick yourself into feeling good again.
Regular check-ins help you get on top of your spending, they can also boost your savings, as you’ll get better at spotting places you can cut back or put a little something extra aside.
Set reminders, put it in your calendar, and add it to the ‘life admin’ list.
And don’t forget to reward yourself afterwards – a snack, a coffee, or an episode of your favourite show can turn this chore into something you actually look forward to.
Understanding your payslip
Income tax: this may also appear as ‘PAYE tax’ on your payslip, meaning ‘Pay As You Earn’.
Income tax is calculated in bands, which are based on how much you earn. If you’ve not worked a full tax year – it runs from 6 April to 5 April – you might qualify for a lower band.
National Insurance contributions: another kind of tax.You pay National Insurance to qualify for certain benefits and your state pension. Like income tax, the amount you pay depends on what you earn.
Pension contributions: if you’re eligible – aged between 22 and state pension age, and earning above £10,000 per year – you should be auto-enrolled into your workplace pension. In many cases, your employer will match some or all of your contributions. This can be a tax-efficient way of saving towards retirement.
Student loan payments: if you’re repaying a student loan, your employer might take the money directly out of your salary to give to the Student Loans Company. It all depends on what you earn.
Court orders and child maintenance: your employer might have to take money directly from your pay for things like unpaid fines, debt repayments and child maintenance.
Workplace benefits: some employers offer loans for things like rail season tickets. They’ll usually take the repayments directly from your earnings.
Benefits in kind: these are ‘non-cash benefits’; perks like company cars, private healthcare and gym memberships.Your employer will pay for these benefits on your behalf, but they’re taxable. For example, if you sign up to private health insurance provided by your company, your employer will pay the premiums but you’ll pay the tax on it.
Salary sacrifice: this is where you and your employer agree to give up part of your salary in exchange for non-cash benefits like pension contributions, cycle to work or technology schemes. Because salary sacrifice exchanges salary for a benefit, you might end up paying less tax and National Insurance.
Payroll giving: this scheme lets you donate to charity directly from your pay.
Keep an eye on money coming into your account
If you have money that lands in your bank account regularly, it might come from a few different places.
There are two things to keep in mind here: when it comes in, and where it comes from. If you’re paid through a monthly salary or benefits like Universal Credit, this can make it easier to budget, since the payments are predictable and regular.
But if you’re a student, you might have different loans landing in larger instalments less often.
So you need to work out how to spread it out over the weeks and months, rather than blowing it all at the Student Union within days of getting paid.
Same goes for the self-employed.
It’s not always easy to predict when your money’s going to land – especially if you work for clients who are a little too relaxed about paying you on time.
But if you can roughly forecast what’s coming in and when, it’ll really help you plan ahead.
Follow the 50-30-20 rule
50% of your income goes to needs – like mortgage or rent, bills and groceries.
30% is for wants – like eating out, clothes and holidays.
20% goes towards your savings (including your safety net), investments and debt repayments.
Generally speaking, the idea here is to prioritise paying off your debt over saving and investing if you don’t have space for both.
If you live in an expensive city like London, or look after kids or elderly parents, you might prefer the 75–15–10 rule: 75% for needs, 15% for wants and 10% for savings.
The percentages aren’t a hard and fast rule, it’s just about getting in the habit of separating your income.
Dividing up your money like this could work perfectly for you straight out of the box, but it’s likely that it’ll need a bit of finessing over time.
Spending less
Laying your spending out might have you saying ‘wait, how on earth am I paying £400 a year for my phone bill?!’ With a little research and planning, you might be able to trim these kinds of costs without too much effort.
Price comparison sites are your new best friend
Who needs 500GB of data every month? Unless you’re running a YouTube channel from a remote island, probably not you.
Check out comparison sites to find a plan you’ll actually use.
Beware of hidden fees
Roaming fees and out-of-contract charges are examples of ninja expenses – silently chopping away at your budget.
Always read your contract to find out how the costs break down.
Master the art of the swap
If you can travel off-peak, would it save you money on train tickets?
Can you really tell the difference between hand-churned yoghurt and the regular stuff?
Probably not, but your bank account can. Little swaps like these can add up fast.
No-spend days to the rescue
Pick a few days each month when you vow not to spend a penny.
It’s like giving your wallet a spa day.
Not only will it help to balance out those days when you seem to spend £30 just by leaving your house, but it’ll also make you feel really smug.
Review your subscriptions
It’s easy to lose track of how many services you’re paying for – Sky, Netflix, Spotify Premium, Prime and who knows what else. Take a good look at what you actually use and consider downgrading or cutting back.
Keep those impulse buys in check:
Delay the decision: many retailers want you to believe that if you don’t buy right now, you’ll miss out on the deal of a lifetime.
It’s not true – sales are always happening.
So try to walk away. You might find that the impulse cools off, but if not, that air fryer (or whatever shiny new thing you have to have) will most likely still be there when you come back.
Think about bigger savings: remember, if you don’t buy it, you save 100% of the cost.
That’s just maths. If you’re not buying the latest gadget, you’re keeping that cash in your pocket for something you’ll enjoy more down the line, like a holiday, a boosted savings balance, or just making the run-up to payday feel smoother.
Remember your long-term goals: your monthly income isn’t infinite (unless you’ve won the lottery or your side hustle is suddenly booming).
So if you buy the new airfryer, you’ll probably have to sacrifice something else.
Is it really worth it? Or will that dopamine hit wear off after 15 minutes when you realise it’s basically exactly the same as the one you already have?
This is an edited extract by Natasha Harding taken from The Book of Money: How to feel good (or better about your finances) by Monzo (Penguin, £10,99) which is published on 4 September 2025
