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Where Should I Put My Money?

Updated: Jul 26, 2023

By: Angela Coronado

One of the major reasons Filipinos venture into a new country is to have more financial stability. While many Filipinos live a better life in the UK, many admit to struggling financially despite the higher salary because of the cost of living and the financial obligations they have back home.

Many of us were also never taught how to manage our money properly, so we miss out on opportunities to save more or even invest for the future while young. Knowing how to do essential financial planning and having clearly defined goals will help you allocate your money to the important things in life instead of spending it on things you don't really need.

So, what should we do with our money?

Pay off high-interest debt.

Paying off bad debt such as credit cards, overdrafts and payday loans should be the main priority in your finances before saving. The current average interest rate for credit card debt is 24% APR, while the average savings interest rate is only 1.11% AER. You're losing a lot of money from paying debt than earning from your savings. Generally, loans above 4-5% should be paid off early, and low-interest ones like mortgages can be paid long term, as money can bring better returns when invested.

There are two ways to pay off debt:

  • Avalanche method: pay off debt with the highest interest first

  • Snowball method: pay off debt with the lowest amount first

The avalanche method makes more sense logically, but the snowball method can give a psychological boost that motivates people to stay on track. Make it a goal in your life not to be in any debt. Please stay away from Buy-Now-Pay-later schemes as they get you to buy things you can't afford.

It is also possible to refinance your debts to lower interest rates to help you get out of the debt cycle sooner. If you need some support or guidance, visit https://www.stepchange.org/ or https://www.citizensadvice.org.uk/debt-and-money/ to get free expert advice.


Save for an Emergency Fund.

An emergency fund (EF) is an easily-accessible amount of cash that you won't touch except for financial emergencies. To be clear, going on a holiday is not an emergency, nor is a grand wedding. Your boiler breaking down, losing your job, or an unexpected car repair are examples of real emergencies. This savings fund aims to give you the time and means to resolve the situation, so you can have something to spend whilst waiting for an income without going into debt. Also, I'd like to stress that a credit card is NOT an emergency fund.

Saving six months' worth of expenses is an excellent financial goal, so you need to know how much you spend per month to determine the amount you should save. As OFWs, your family back home might also rely on you for financial support in their emergencies, so keep that in mind. If you are currently with a lot of debt, save a month's worth of EF, pay off your debt, and then continue saving for a larger EF that will suit your needs.

It would be best to hold your EF in cash, or cash equivalent, which you can instantly access and does not carry any risk. Examples include instant access savings accounts, current accounts, and instant access National and Savings and Investments (NS&I) premium bonds. Look around for easy-access savings accounts with the highest interest rates.

Never put your emergency fund on anything with risk, such as equity investment or cryptocurrency, nor restricted access accounts like Lifetime ISA.

Emergency funds are not the only financial protection worth investing in, either. If your job has you doing things like working with an ambulance or in any other high-risk environments, insuring yourself with things like safety critical medicals should be a priority. You want to make sure that you’re set up against the risks that can take your livelihood.

Set savings and investing goals.

Once you have sorted out the first two goals, you are ready to save more and plan for the future. Savings goals can be divided into short-term and long-term. Typically, short-term goals are set to be achieved within five years, and anything longer is considered a long-term plan.

It is vital to set SMART goals: Specific, Measurable, Achievable, Realistic, and Time-Bound. For example, if your goal is to save money to buy a property, you can't just say, "I want to buy a house". Instead, with the SMART goal in mind, you should say, "I want to buy a house with a £25,000 deposit in 5 years. That means I have to save £417 per month to reach that goal in time".

Do this with all your goals and tally the total required savings to determine if your goals are realistic or not. Many people set unrealistic goals that are way bigger than their income. As a result, they get frustrated for not reaching their target and just give up.


Always remember, it's all a matter of good financial planning. You can use Nova Money to do this and make your life easier. The bonus is it even sets the monthly budget for you!

Common examples of short-term goals are holidays, home refurbishment, weddings, and even a house deposit. You can save this money on a regular savings account or fixed-term for higher interest. If you want to buy a house, a Lifetime ISA is the best account to have, provided you meet all the criteria.

A short-term goal that immigrants should be saving up for but often forget is "Immigration expenses". These fees are no joke. You have the visa renewal after 2-3 yrs, depending on your contract. But the biggest slap is the Indefinite Leave to Remain, which is currently £2,389 per person applying. How much more if your family is here with you? A year after ILR, you can apply for British Citizenship, which costs a whopping £1,330. So you should be preparing for these things as soon as possible.

On the other hand, investing your savings and growing your money to build wealth can be your most significant long-term financial goal. You can use a compound interest calculator to see how monthly payments of £50, £100 and so forth to your investments will add up to your expected timeframe.

Examples of where you can invest your money are stocks, real estate, bonds, etc. It all depends on your risk appetite and time horizon, but before you start investing, make sure you understand the risks involved and where you choose to put your money. Be aware of scams and don't believe in get-rich-quick schemes. Investing is a long-term game.

How to reach your goals?

The most important thing in personal finance yet overlooked by many is budgeting. No matter how motivated you are to reach your goals, you will always go over your limit if you don't know how much you should be spending.

The best way to budget is doing the "pay yourself first" method. Set aside money for all your essential bills and savings goals every payday, then live off the rest. It might be easier than done, as some people struggle to stay on that allowance. Hence, apart from budgeting, you also need to track your spending to know if you're spending too quickly, and you need to adjust your spending pace to make sure you survive until the next salary.

You can do all this financial planning with a single app: Nova Money. From knowing your monthly expenditures to setting a budget and SMART goals, managing your money has never been this easy. You can also see your progress to see if you're staying on track. Nova simplifies all the complicated parts of personal finance. You can download the app here for free.


About the writer: Angela is a UK Registered Nurse and co-founder of Nova Money and an advocate for financial education, a personalised AI Money Planner. If you want to join their Facebook group Financial Freedom Community, please visit https://www.facebook.com/groups/340745271074753

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