Improving Your Financial Strength

May 23, 2022

In 2020, we entered and endured  the Covid-19 Pandemic.  What followed was a roller-coaster of economic proportions such as the stock market dumping to delta'ing to an all time high within a matter of months.  In conjunction to the pandemic, many businesses closed whilst others are now struggling to meet the current consumer demand (Consumer Price Index at  approximately 6.2%) which has massively raised prices.  With the various conflicts around the world, the price of Oil and Gas have gone parabolic compared to their absurdly low 2020 levels:

Crude Oil prices within the last 3 years

Crude Oil price within the last 3 years - macrotrends.net

Since interest rates having risen to 1% and set to go higher in order to try and combat the "cost of living" crisis and a looming recession, it is now more important than ever to apply a strong sense of fiscal responsibility with your finances.


But don't fear!  This isn't the first recession or even depression and in this post, 7 tips are outlined to help you have a better handle on your finances and ride on top of the storm.

1: Getting a Budget Planner


“If you fail to plan, you plan to fail”

- Benjamin Franklin


Budgeting not only helps you to control your spending, it also helps you to prepare for eventualities, climb out of debt and create a solid groundwork for a financially independent future.  In short, it’s a peace of mind in a storm of emotion (due to pressure and excess) and constant worry.  A really good and simple planner I used in the past was created by Martin Lewis from Money Saving Expert:




It’s a very simple spreadsheet that requires you to put your incomings (salaries, dividends, irregular gifts etc) and outgoings (living expenses, entertainment, mortgages and debts) and then calculates your surplus (if you have any).  Even if your income is variable and your outgoings seem crushing, simply having them down on paper helps you to begin to form logical decisions that manifest into a more positive financial standing down the line.


Even if you the planner indicates that you are haemorrhaging money, its far from the end of the world.  Simply having the knowledge that something needs to be done is halfway to the finish line.  How you do it is up to you, the expectation is that you use the budget planner to make an informed decision.  Proper Planning Prevents Poor Performance and in this current climate, the clear performers will be those who planned.

2: Using a Reward Bank Account

It is amazing how very few people have bank accounts that actually provide them tangible benefits to their everyday spending or provide perks that complement them in some way.  We have the wrong impression that simply saving money in the bank will net us wealth over the long term.  Those days either didn’t exist or are long gone.  By the end of 2021, the average interest rate on UK savings accounts was 0.35%.  So, if you kept £10,000 in your bank account for the entire year, the bank would have paid you an interest of £35.  This is absurdly low, because between 2020 and 2021, the cost of goods increased by an average of 2.6%.  This means that your spending power of £10,000 would have decreased to £9,742.  A measly 0.35% cannot offset this and it pretty much immortalizes the saying that “you cannot save your way to financial freedom”.

If you need a bank account as a platform for collecting your salaries and for spending.  You might as well get it to work for you and the easiest way to do this is by turning it into a reward account.  Reward accounts offer special incentives and boons for saving and spending money with that particular financial institution.  An example is NATWEST’s standard reward account which requires a minimum of two monthly direct debits of more than £2 each.  Following a £2 monthly fee, you get the following rewards:

  • Up to £5 back in direct debit and mobile banking rewards
  • 1% (0.25% for fuel) cash reward in supermarket and high-street spend when you use an accompanying reward credit card - which also eliminates the £2 monthly fee
  • 1%+ (can go as high as 15%) in cash rewards when you spend at specific stores.  For example, there is currently a 10% cashback reward when you spend online at H&M

There is no benefit to not going to your bank (whatever it may be) and changing your account.  At the very least, you would be getting money back on purchases you needed to spend anyway.  If your monthly groceries are £100, 1% cash back would give you back £1 every month.  If fuel is £50 per week, you’d get back £0.13 which is £0.42 per month.   A pittance when viewed in a vacuum, but it gains momentum over time when combined with a guaranteed £5 per month and cashback on any other purchases with your card.  Using the examples raised, you could be getting a minimum of £6.42 per month just by doing the things you have to do.  The money that you build up every month could easily be trickled into your short-term savings account.  Begin to make your money work for you and get a reward account.

3: Consolidating Direct Debits and Reducing Costs

Direct debits are generally positive.  But too many direct debits to too many companies is both expensive and mentally crushing.  Consolidating several bills under a small number of umbrellas is likely going to be cheaper in the long run.


For example, telecommunication utility bills normally encompass:

  • Internet with or without a landline
  • Mobile phone
  • TV/Streaming subscription

Paying these separately for 3 different companies is wasteful.  If you allow one company to provide you all 3 services, you will likely net a cool discount on a package deal.  Some of the biggest companies who provide these services such as EE and Sky will happily provide such discounts and incentives.  It is also cheaper to pay a monthly direct debit for your gas and electricity rather than be issued a quartlery bill.  Suppliers are generally happy to apply a discount if you pay this way.  If you have the ability to change your service providers and suppliers, please use USwitch, CompareTheMarket or other price comparison websites.


On the topic of reducing costs, there is no benefit to paying full price for anything when you don’t have to.  If you wouldn’t pay full price for your various electronics and clothing items, then you definitely shouldn’t pay full price for your living expenses if you don’t need to.  The aforementioned USwitch, CompareTheMarket and other price comparison sites not only compare competitively priced deals and packages that enable you to get the best bang for your buck, but they also offer incentives and memberships that may drastically reduce your costs down the line.  For example, renewing your car insurance with CompareTheMarket may not only result in cheaper car insurance but would also result in a complementary membership with Meerkat Movies which gives you 2-for-1 cinema tickets every Tuesday and Wednesday at all major cinemas nationwide.  Never pay full price for a movie date again!

For your normal grocery shopping, take advantage of schemes such as Tesco Clubcard, Lidl Plus, My Morrisons, Nectar and many more.  These stores often have large discounts on many singular and bulk items as well as coupons for registered members.  Before you go shopping, do try to check for bulk deals, reductions on quality items or other incentives.  For other items like clothing and electronics, Black Friday and January sales aren’t the only discounts throughout the year.  Many clothing and electronic stores have sharp discounts on last seasons products or are trying to market a new product and will do so at a reduced priced.  The takeaway from this is to be vigilant with what you buy.  Aggressively hunt for the best deals that will keep more money in your pocket.

4: Aggressively Lowering Debt

"The rich rules over the poor, and the borrower is the slave of the lender"

- Proverbs 22:7


It cannot be stressed: do not underestimate the power of a peace of mind. I'll use investing as an example.  Many people since the advent of COVID-19 invested their money in the stock market. The problem is, most were already saddled with debt, took out loans or over-leveraged themselves in order to get rich quick.  It is said that the recent years in the stock market were one of the biggest transfers of wealth.  Of course it was, most people lost money in the market and are now in an even worse situation than they started whilst still chasing that winning stock that will get them out of their mess.

This is what happens when you are chained by debt engage in a cycle of stress and poor decision making. Do not recklessly spend money or invest in the stock market when saddled with debt.  With regards to investing, think of trying to invest when you have an overdraft.  Some banks such as HSBC charge 39.9% APR for arranged over-draft (this is disturbingly high).  If you invested £1000 in the stock market and did extremely well for the year, say making saying 30% on your original investment, that's £333 you've made.  If however within that same year time period you were overdrawn £1000, you would have paid a total of £338.4 in charges – wiping out your gains.  And this is the reality of many, living in overdraft or using credit cards to pay off debt one after the other.  Generally, you should only be utilizing between 25% and 33% of your total credit and it should really be utilized on things that increase your income or assets.  Any higher and you are officially over-leveraged.


Aggressively clearing your debts means that your money is yours to do with how you wish, the possibilities of which are limitless.  I'll repeat myself, don't underestimate the power of a peace of mind.

5: Short Term Savings Funds

These are commonly called Emergency Funds and they are very important safety nets. But from my experience, the discourse on them is pretentious.  I’m not a fan of emergency funds that pay for 6 months worth of expenses+ mainly because I feel that such an amount of money doing ‘nothing’ is wasteful.  Furthermore, the average person simply doesn't have the opportunity to save for 6 months worth of expense.  But there are more knowledgeable people than I who attest to that amount of expense and the recent pandemic illustrated that many jobs aren't 100% safe.  A short term fund doesn't have to be just incase your job makes you redundant.  Thousands of people have fallen into poverty for far less.


Having a fund to pay for imminent expenditures or random repairs (such as a car service) is very helpful.  The point of such a fund is to prevent you from slipping into debt from either borrowing money (credit card and overdraft) or taking out a potentially ruinous Buy Now Pay Later scheme.  Again, Proper Planning Prevents Poor Performance.  £1000 saved up in a tidy bank account pays for both the holiday and any extra expenditures that happen during it.  You won’t come back home with a nasty bill of overseas charges from using your credit card or overdraft.  £1000 saved up is your yearly Service, MOT, Repairs and any other surprises for your car.

6: Increasing Your Income

Now that you've lowered your costs across the board and are at a position where debt isn't crippling you, its now time to think about increasing your income and adding secondary streams. Even if you decide to base all of your income in one job, you must still aim to increase your skill set and command higher wages in whatever profession you work in.

In general, you must aim to focus on your CPD and improve\gain\diversify new skills that increase your worth and earning potential.  Furthermore, talents and hobbies can be turned into multiple income streams if you can use them to provide a service to others.  Some examples here are:

  • Nail Technician
  • Session\studio musician
  • Tutoring, Teaching and Mentoring
  • DIY\Handyman
  • Web development and scripting
  • Delivery driver
  • eCommerce generally

and many more!

7: Investing the Surplus

This is quite a touchy subject and there is a wealth of aggressively bad information\advice out there.  I am definitely not in a position to give investment advice.  The only two pieces of advice I will give is:

  • Open up a lifetime ISA (LISA).  With 25% on top of a yearly cap of £4,000 saved, its a good start to building long term wealth.  Investing is slow, consistent and fruitful
  • Consult an actual accredited financial\investment planner or advisor.  Successful journies in the land of buying stocks and other assets require credible guides

Ayilaran Academy as a whole has benfitted greatly from one such investment advisor, please reach out if you would like the details.  Otherwise the way to be consistently successful in the investing world is to:

  • De-risk by investing only what you can afford to lose
  • Invest in what you know or are comfortable with
  • Diversify across different companies, sectors, industries and even geographical locations
  • Invest for a suitable time-scale, at least 5 years

At this point, I hope you found this post useful and informative.  Good luck!

- Dr. Adetokunbo Ayilaran

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