Moving to the UK can be an exciting experience but you also have to prepare. Managing your money and getting financially stable should be priorities for all newcomers to the country and here we’re looking at some key steps for ensuring financial security in your new home. In this financial guide we’ll look closely at:
- Opening a UK bank account
- Planning and managing monthly expenses
- Setting goals and how to plan ahead financially
- Budgeting for your emergency fund
- Sending money back home
Opening a UK bank account
It is not a legal requirement to have a UK bank account. Many British citizens do not have one. However, a bank account is a good idea for keeping your money safe and also to access the job market properly. Many employers will not employ someone without a UK bank account so it is a vital step in ensuring your financial security in the UK.
Traditional high street banks in the UK generally need two forms of documentations to open a bank account:
- Proof of identity: this can be your passport, driving licence or national identity card. For most immigrants their passport is the natural choice.
- Proof of address: this usually needs to be a recent utility bill, tenancy contract or a council tax bill.
There has been significant growth in the digital banking sector in the UK. These digital-only banks often do not require proof of address but provide the same level of service in terms of an account for wages and any other funds to be deposited in. There is a growing range of app-based banks which are great for newcomers to the UK who may not have proof of address easily due to their recent arrival.
Planning and managing monthly expenses
Your fixed monthly expenses should be your first priority in your new home (to read: Top 10 apps you need to manage your personal finances). These expenses you have to pay every month no matter what. Your fixed expenses cover all our basic bills to live comfortably and include things such as your rent payments, food bill and utility bills such as electricity and water.
For financial security, you need to ensure you have your fixed monthly expenses covered before any further considerations. It also gives you the bare minimum you need to earn to survive. Of course, we all hope to earn more than the bare minimum but it is a good starting point for finding suitable job options and ensuring you always manage your money with your priority payments in mind. Knowing how much spare money you have each month also helps you plan ahead and consider your goals financially.
Setting goals and how to plan ahead financially
Once you’ve worked out your budget, you will hopefully find you have a little spare money each month. This gives you a chance to set goals and plan for your future. It’s easy to spend extra cash without thought but when you consider how much more you could be doing, you’ll quickly want to change your ways.
Clear financial goals can help you ensure your spare cash is put to good use. Goals could be anything from saving up a deposit to buy a property to budgeting for a visit to family back at home. It could also be something like paying off a priority debt or funding further education. In all instances, having a plan helps to ensure you can meet and achieve your goals. Even if you only manage to save £5 a month, it’s more than nothing!
Budgeting for your emergency fund
An emergency fund should really be one of your financial goals. It’s something everyone should aim for, regardless of their immigration status. Your emergency or rainy day fund ensures you have a safety net of cash available for worst case scenarios. No one likes to think too negatively but job losses do happen, as do accidents and other changes in circumstance. An emergency fund gives you a little peace of mind in these situations. Personal finance experts suggest trying to save around 6 months’ fixed monthly expenses if you can.
Your emergency fund gives you the power of choice. It means you have a buffer if you do need to change jobs or there are other changes in circumstances in your life. You can also take more risks when it comes to job opportunities as your emergency fund can keep you afloat while you find the right role.
Sending money back home
Most immigrants plan to send money back to their families in their home country. Therefore, planning for international transfers is also important. Using a reliable money transfer service is the best option as it usually works out much more cost friendly than using your UK bank and their international transfers service.
Small World makes it easy to transfer your money to over 90 countries worldwide. We offer a range of different transfer methods and keep our fees transparent so you can work them into your monthly budget. It’s also important to have a good understanding of exchange rates to ensure you’re sending money back at the best possible time.
Moving to the UK comes with costs and getting yourself setup can also be expensive. However, once you are settled sticking to a well-designed financial plan will help ensure your stay is as successful as possible. It will also ensure you make the most of your hard earned money too.