12 Days Of Finance, Day 1: This Is Why You're Broke & How To Fix It

What if you could completely transform your money game in just 12 days? On today’s episode of the Pennies To Pounds Podcast, we’re kicking off our special series, The 12 Days of Finance, to help you avoid the financial traps that leave you feeling broke and set yourself up for success in 2025.

In this episode, we’re covering:
✨ Why lifestyle inflation is sabotaging your progress
✨ How to budget without feeling restricted
✨ The non-negotiable need for an emergency fund
✨ Tackling high-interest debt (and why it’s costing you more than you think)
✨ The basics of smart investing to grow your money

Listen to Episode 96 for a step-by-step guide to start investing.

Start 2025 on the right foot with strategies to save, borrow smarter, and invest confidently. Let’s make financial security your reality next year!

Transcript

Speaker 0: 0:00

Hey guys and welcome back to the Penalty Sponsor Podcast with your host, kia, and this is a podcast. We aim to dispel your myths, simplify difficult financial jargon and rectify your own personal problems. Happy, it's actually Monday today. It's happy Monday, everyone, and welcome back to another episode. But we're in a brand new series. I'm so excited.

Speaker 0: 0:16

This is the 12 Days of Finance. I know I've neglected you guys for a couple of weeks. A lot's been going on. I've been traveling and even when I traveled, a lot happened within that. But I wanted to make sure that we are in the right headspace for the new year. So I decided it is time to up the ante, to give you things and give you the tools that you need to master your finances in the new year. So, with a brand new 12 Days of Finance series, from today, the 23rd of December, all the way through to, I believe, the 3rd of January, you will have a brand new episode 9am every single day along those 12 days to help you to level up your finances, and I'm super excited because I've got some great things planned. I'm really just going to chop it up. Each episode is between 8 to 10 minutes, so they are bite-sized, compact tools and quick, efficient tips that you can implement into your life to make sure that 2025 is the best financial year that you've had to date so far. Episode one today we are talking about why you are broke and these are the money tips that we're going to avoid in 2025.

Speaker 0: 1:11

Now the first one, and a big one that I see especially among young people, is lifestyle inflation. Lifestyle inflation is when you have a certain lifestyle, so let's just say it's at eight, your lifestyle. You then may see a pay rise, you may be able to negotiate a better salary, whatever it is. You see your income increase and instead of saying wow, okay, this difference in my income, I'm going to put it away into savings, I'm going to put it into investments. A lot of people will then go ahead and increase their lifestyle and how much they spend on their lifestyle. It might be taking out cars, on finance, I'll be getting a brand new phone, it might be getting a new TV, a new sofa. Whatever it is, their lifestyle increases with their income quite often on par. There's no problem with a small increase. You know, if your income goes up 20% and you increase your lifestyle by 5%, that's fine, but a lot of people. Their income goes up by 20% and they increase their lifestyle by 20%, sometimes even more, and that is something that we are no longer doing. Instead, if you do see an increase in your income, you're going to put the difference into something else. Treat yourself, get a little thing, but make sure you've got a plan for your money, the excess that you've got, because whatever last year you've currently got, you could actually afford it. So we can afford to put the extra money into something else that's going to better us in the future, whether it's your pension, another retirement fund, savings investments, investing for your future kids whatever it is, you can put it into something else.

Speaker 0: 2:23

Number two is we are no longer ignoring budgeting. The amount of people that I speak to who do not have a budget is astounding. The reason why I think budgeting is so important is because, even though it might seem boring and seem very like oh, just a spreadsheet or writing things down, it is the plan that you need to know exactly how much money you've got coming in and where it's going. If I ask you right now, do you know exactly where every penny, dollar, pound is going? Could you say that confidently with a yes Chances are? You probably just said no to that, and that is why budgeting is so key. I budget my money every single month both my personal and my business money because I need to know exactly how much money I have and where it's going, and then I can also assess every single month if I need to make any changes to where my money is going. So if you haven't already got a budget, you need to do that. Use a spreadsheet We've got one on the pennies to pounds website. Use an app like Emma from the UK, or use plain old pen and paper. Whatever you choose, start budgeting.

Speaker 0: 3:20

Number three is no emergency fund. If I learned anything from the last five years is that emergencies can strike. Life can change at the drop of a hat. Lockdown for me was the biggest thing. No one saw it coming, yet it changed everyone's lives across the globe and it's not really gone back to completely how it was pre-Covid. A lot of people during Covid lost their jobs, lost their means of income. I know for me, definitely that changed a lot and that during covid lost their jobs, lost their means of income. I know for me, definitely that changed a lot and that is why it's so important to have an emergency fund. When things are great now it's great. Enjoy your life, enjoy things. But you should always start putting away a little amount to make sure that if things do go wrong if you do lose your job, your car breaks down, you do fall ill you've got money to fall back on. I always aim for around maybe five percent of your income, or maybe around 50 to 100 pounds. If you can spare it, you've got money to fall back on. I always aim for around maybe 5% of your income, or maybe around 50 to 100 pounds if you can spare it. If you can't spare that much, find an amount where it's a percentage or a number that you can put away every single month for emergencies. Trust me, future you will thank you for it.

Speaker 0: 4:16

Number four is we are not taking out high interest debt. Oh, this is a big thing. I've said before. I've been very vocal about the access to credit that we have. It has become so much easier to access credit, whether it's buy now, pay later or loans, overdrafts, loans, anything like that has become so much easier, and a lot of this credit costs so much money, especially things like payday loans. Oh my gosh, the amount that you pay back versus what you borrowed. A lot of people don't really factor that in. You think about oh I really want this thing right now. I want to get a brand new TV or a big thing, I want to get a brand new car and you don't really realize how much money on top of the actual value of the item that you're buying, how much money extra you're paying and we are no longer doing that because it costs you so much money to take things out.

Speaker 0: 5:03

If you do need to borrow money, try and do it in a smarter way. See if you can get 0% interest credit cards. See if you can get a balance transfer card which might be cheaper, so you pay less interest over the period of time. Figure a balance transfer card which might be cheaper, so you pay less interest over the period of time. Figure out ways that you can actually lean on credit If you need to. That's a big one that isn't going to cost you an arm and a leg, because that is so important. And we don't want to be throwing money away, because all you're doing is giving free money to lenders just so you can have money out, and that's money that I'm sure you could do with every month and put towards something else. Whether it's your dream holiday, dream car, dream home, whatever it is, you can put it towards something else. And then, lastly, a very big one that we talk about all the time is we are no longer not investing.

Speaker 0: 5:40

There is absolutely no excuse to not be investing. It is so easy to invest you can start with one pound. You don't need to be a millionaire to start investing you can start with one pound. There is another episode on the Penny to Pounds podcast. I will put a clip of it here. If you're watching the podcast, if you're listening, it'll be in the description the exact number to go and have a look at. But that is a step-by-step guide on how to start investing.

Speaker 0: 6:02

But, honestly, one of the best things about living in this generation is how easy it is to start investing. I remember being 18 and asking my dad how do you invest? And it he told me he has to do this and that and that brand. It was so hard. Now there are so many different platforms that have quite low fees that allow you to start with as little as one pound that you can start from today.

Speaker 0: 6:21

There's no excuse to not be investing. And also, on top of that, if you have a pension fund whether it's a personal one or whether it's through work you are already investing. So there's no more. I'm not an investor. Investing is how we're going to get ahead and reach the goals that we have for our lives. There was no more being broke in 2025. And I pledge that this episode is going to give you that kickstart that you need. If one of these tips, or maybe all of them, resonated with you, please do let me know in the comments of the podcast if you're listening on Spotify, or drop us a message on our Instagram and TikTok account and let us know what you're planning to do better and what we can help with via the podcast and our social channels, because that is what we're here to do. But yes, thank you for listening to episode one of our 12 Days of Finance. Be sure to check back this time tomorrow for the next episode in the series, and we're back again tomorrow with another episode. Bye, guys.