5 Hacks to Being Financially Well: Doing The Right Things Each Day
In today's complex financial landscape, achieving genuine financial wellbeing doesn't require elaborate planning or expensive advice. What most people need is a practical, step-by-step approach that aligns with proven financial principles while remaining accessible to everyone. Let's explore how "hacking" financial wellbeing can provide a straightforward path to financial stability and financial growth.
You could be 5 Hacks away from Being Financially Well
1. Improve Personal Free Cash Flow.
The foundation of financial wellbeing begins with having more money coming in than going out. Sounds kind of obvious doesn’t it, but the truth is most of us struggle with getting from balancing our budget to growing our financial wealth. Research from the Financial Conduct Authority shows that 10.7 million UK adults have low financial resilience, often due to negative cash flow [1].
Hack 1: start by tracking all income and expenses for 30 days. This simple practice alone can increase awareness and reduce unnecessary spending by 15-20%, according to behavioural finance studies [2].
2. Start a Savings Habit (but see the note on dealing with debt).
The Money and Pensions Service (MaPS) reports that 11.5 million UK adults have less than £100 in savings [3]. Establishing a consistent savings habit - regardless of amount - creates financial security and reduces stress.
Hack 2: automate small, regular transfers to a separate savings account immediately after receiving income. Even £25-50 per month builds the neural pathways for positive financial behaviour. Set up a monthly direct debit as soon as you´re paid, and any money you have left at the end of the month, transfer that into savings too.
* We need to talk about debt here: building up savings is great, but if you have debt, you should be reducing that first. Why? Because the interest you pay on debt is, more likely than not, way higher than the interest you can earn on savings. I’d normally recommend building up around three months of monthly expenses as your emergency “rainy day” savings fund, and then use your monthly savings allocation to reduce debt. We have another blog that tackles this, as well as tools, that will help you prioritise to achieve success.
3. Find Ways to Increase Savings.
Once the savings habit is established, focus on optimisation. This doesn't mean drastic lifestyle changes, but rather making incremental improvements. Sell things you don’t need, try batch cooking to reduce how many take-aways you eat, put in place a mandatory 24 hour pause in buying something, plan your daily expenditure in advance and cut out anything that’s unnecessary. There’s a tonne of resources out there from people who hack their spending.
Hack 3: apply the 1% rule - increase savings rate by just 1% every few months. Research from Vanguard shows this approach is more sustainable than attempting large adjustments [4].
4. Know When and Where to Invest: Time In The Market is critical.
Contrary to popular belief, timing the market is less important than time in the market. The key is understanding when your financial foundation is secure enough to begin investing.
As far as what to invest in:
1. Make sure you’re using your workplace stakeholder pension to the fullest: not only does your employer chip in but the Government also helps through tax benefits
2. Use your annual ISA allowance to the fullest; your gains are tax free so long as the money remains in the ISA structure (called a “wrapper”)
3. We’re big fans of Vanguard’s Life Strategy Funds, but there are others too; these are ready made portfolios that are invested in a diverse range of listed companies and bonds for greater diversify and at really low fees. Time and time again these types of investments beat elaborate and sophisticated strategies over the long run.
Hack 4 : consider investing once you have 3-6 months of essential expenses saved and any high-interest debt managed. Evidence shows that simple, diversified investments consistently outperform most active management strategies over time [5].
5. Minimise Fees and Costs.
The impact of fees compounds dramatically over time. A seemingly small 1% difference in fees can reduce your final portfolio value by 20% over 30 years [6].
Hack 5: prioritise low-cost investment platforms and avoid complex products with hidden charges. Transparency should be your benchmark.
Essential Tools for Financial Wellbeing
To support this streamlined approach, several accessible tools and coaching practices stand out:
Cash Flow Management Apps: simple budget trackers that categorise spending and highlight patterns, without requiring extensive manual input.
Automated Micro-Savings Tools: applications that round-up transactions or make small, regular transfers based on spending patterns.
Financial Health Score Trackers: tools that measure progress across multiple dimensions of financial wellbeing, providing motivation and clear metrics.
Goal Visualization Frameworks: evidence from positive psychology shows that visualising financial goals significantly increases achievement rates [7].
Decision-Making Templates: simple frameworks for making financial choices that align with personal values rather than external pressures
The Wellbeing Connection
Financial wellbeing isn't merely about numbers - it's about creating a healthy relationship with money. Financial Therapy Association research shows that financial behaviours are deeply connected to emotional and psychological factors [8].
Effective practices include:
Values-Based Planning: starting with what truly matters to the individual rather than generic financial advice.
Habit Stacking: connecting new financial behaviours to existing daily routines.
Positive Reinforcement: celebrating small wins rather than focusing exclusively on end goals.
Mindfulness Practices: addressing emotional spending triggers through awareness techniques.
Why This Approach Works
Traditional financial planning often fails because it emphasises complexity over consistency. The "hacking" approach recognises that financial wellbeing is built through repeated small actions, rather than perfect planning.
As the Financial Inclusion Centre notes, the most successful interventions focus on behaviour change rather than information provision alone [9]. This simplified framework provides both the knowledge, and the actionable steps needed for lasting financial resilience.
By making financial wellbeing accessible to the 92% of UK adults without traditional financial advice, we can shift the national conversation from financial distress to financial empowerment - one practical step at a time.
References:
[1] Financial Conduct Authority. (2023). Financial Lives Survey.
[2] Journal of Consumer Research. (2022). "Spending Awareness and Financial Decision-Making."
[3] Money and Pensions Service. (2023). UK Financial Wellbeing Survey.
[4] Vanguard Research. (2023). "How America Saves."
[5] S&P Indices Versus Active (SPIVA) Scorecard. (2023).
[6] Financial Times. (2022). "The True Cost of Investment Fees."
[7] Journal of Positive Psychology. (2022). "Visualization and Financial Goal Achievement."
[8] Financial Therapy Association. (2023). "Connections Between Financial Behaviors and Wellbeing."
[9] Financial Inclusion Centre. (2023). "Effective Interventions in Financial Capability."