Money professional shares 5 private finance suggestions – do them as quickly as you receives a commission
A money expert has shared a handy checklist for what to do as soon as you get paid
Making the most of your pay check is more important than ever(Image: Images By Tang Ming Tung via Getty Images)
Pay day isn’t just a chance to spoil yourself, it’s an opportunity to seize control of your financial destiny. With the escalating cost of living and ongoing economic uncertainty, using your wages shrewdly matters more than ever before.
That’s the advice from financial guru Faro who’s gone viral on TikTok under the username @financebyfaro. He outlines a straightforward and accessible strategy to enhance savings, cut debt, and begin building your wealth.
In the video, Faro reveals his guidance stems from his background “as an accountant and finance expert” – and his recommendations are rooted in established financial wisdom. If you’ve ever pondered what to do the moment you receive your wages, this strategy could help you establish financial stability, and prepare you for the future.
“Thank you for the help,” remarked one delighted viewer, whilst another added: “Great information”. A third responded: “Great tips, thanks for sharing” and a fourth continued: “This is great advice, thank you”.
Tackle high interest debt first
Faro’s initial suggestion is to eliminate any high interest debt as an urgent priority. He clarifies how “any debt over 8% is considered high interest” and highlights credit cards, payday loans or personal loans as typical examples.
According to the UK’s non‐profit money guidance service MoneyHelper, clearing the most costly debt first saves money over time because the expense of high‐interest borrowing can vastly exceed what you’d earn from savings.
Save, save, save
“Leave some money in my current account so that I can cover two months of living expenses, nothing more, nothing less,” notes Faro in the video. Financial advisers say this approach helps you meet immediate bills without keeping excessive idle cash.
According to HSBC, money sitting in a standard current account typically earns minimal interest, so maintaining only essential funds there can make your money work more effectively elsewhere.
Establish an emergency fund
Third, Faro encourages people to prepare for the unexpected: “I would save three to six months of living expenses in cases of emergency.”
According to NerdWallet, financial advisers commonly recommend an emergency fund of this size so you’re protected against redundancy, illness or urgent repairs without resorting to credit.
Pay into your workplace pension
In his video, Faro explains: “I would contribute to my workplace pension. If my workplace is offering a match, then I’ll contribute enough money just to get the full match.”
The Pensions and Lifetime Savings Association notes that employer matching contributions are effectively free money, boosting your retirement savings with a guaranteed return you won’t get from most other investments.
Invest in a tax-advantaged account and low-cost index funds
Lastly, Faro recommends individuals to “open a tax advantage investing account and put my money into a low cost index fund,” providing a list of funds in the video. According to The Open University, tax‐advantaged accounts such as ISAs enable UK savers to expand investments free from income or capital gains tax, and low‐cost index funds have historically yielded robust long‐term returns compared to attempting to select individual stocks.
