Every so often we find ourselves comparing our lives to others’. When it comes to our finances, this usually means looking longingly at someone enjoying the lifestyle we want - but remember that you can’t reap the rewards without planting the seeds! Although it isn’t good to obsess over “keeping up with the Joneses”, peeking over the fence at the neighbour’s garden every once in a while can help you to see where yours fits on the scale, and what your next steps might be. We’ve rounded up some of the latest facts and figures to help you work out where you fit in, and concentrate on keeping your own grass green and healthy.
Where are you on the income scale?
Social taboos often prevent us from asking the questions we most want to ask - including “how much do you earn?” Thankfully, the Treasury releases anonymised data that allows us to find out what other people earn without causing an awkward silence at a dinner party. Figures released in the Budget papers this March revealed that the top 10% of earners have salaries that are equal to more than the bottom 40% of earners combined. According to these figures, a single person with no children on an income of £39,000 or more will be in the top 20% of earners in this group. For households with two adults and two children, the bottom 10% earn an average of £19,700 with the top 10% earning £151,400 on average. Knowing where you fit in can help you to make the most of what you’ve got, and even work out whether you’re being undervalued at work.
How does your spending compare?
Of course, your income is only one part of your financial picture; it’s just as important to find out how much is going out every month. The 2013 ONS Family Spending report found that the average household spends £489 per week. Housing, fuel and power accounted for the biggest chunk of spending, coming in at £68 per week (excluding mortgages), followed by transport at £64.10, recreation and leisure at £61.50, with food and non-alcoholic drink costing the average family £56.80 per week. Do you prioritise differently? Working out how much you spend in different areas of your life can help you to create an effective monthly budget that helps you work towards your goals. Why not login to MoneyHub and check your spending today?
Are you in control?
Understanding the principles of planting and nurturing your assets is the first step to reaping the fruit you want. Someone may look like their crop is flourishing, but without healthy roots the harvest could be cut short - according to a recent survey, 20% of people lack confidence when it comes to managing their money. Almost a quarter - 24% - of people say they live for today rather than planning for tomorrow, and a worrying 16% of people can’t identify their balance on a bank statement. How about you? However much you have, getting to grips with the basics of financial planning can help you to make the most of what you have today, as well as getting to where you want to be in the long term. Take a look at our 5 minute guide to financial planning to get started.
Do you have a safety net?
A little rain is good for the garden, but not for your cash flow! It is recommended that everyone have a rainy day fund of at least three months’ salary to tide them over in case of emergency - but how many of us actually do? A recent survey from HSBC found that over a third of people (around 8.8 million UK adults) have less than £250 in savings - not enough to last a week. A quarter of people have no savings to fall back on at all. Make sure you’ve got a rainy day fund in place to protect your precious crops from bad weather - take a look at our guide to saving for a rainy day for more information.
Can you beat the average? ONS figures show that the average household is able to put away £5.20 a week, or £270.40 a year, in savings - we want to know how you compare. Why not take a minute to vote in our poll? (all answers are anonymous).
How much do you save each year? (£)
Comparing ourselves to others can be beneficial; it can inspire us to get where we want to be - or make us thankful for what we have! Ultimately however, the most important thing is to focus on tidying up and taking control of your own finances. The MoneyHub tool can give you a clear picture of your entire financial universe - or garden - helping you to budget, track and grow your money. So what are you waiting for? Stop looking over the fence, prune those hedges and spruce up that lawn!