The average full-time wage in the UK sits at around £30,000 according to a variety of sources – this of course varies between industries and the figure is lower for those working part-time. For some, this may seem like a lot; for the richest human on the earth, not so much – but how well does this average wage set a person up to live in the current economy? This article explores the realities of managing life while earning the average wage, including tips to consider when making the most of your income.
Following Brexit, the COVID-19 pandemic and a series of other events that caused global economic uncertainty, living on the average wage has become considerably harder to manage for those working in the UK. The journey to complete financial freedom is a broad one, with no single pathway to success. This does not, however, mean that it is unattainable.
Understanding the Average Wage
The average figure for UK wages represents the median income that workers in different industries are granted. In order to budget effectively, manage expenses, and work toward a lifetime’s worth of savings, it is crucial to understand what you’re working with. Perhaps the first stepping stone in this educational journey is to become financially smart, where you can take online courses or conduct research into the basics of budgeting, money management and general financial empowerment.
Beyond this, it is important to stay updated on a range of economic variables that affect your financial situation. Staying informed on interest rates, inflation and minimum wage salaries can be really enlightening, and you can use sources like the Bank of England for trustworthy information. On a global scale, you might want to consult financial sources from other countries, like the S&P 500 futures chart to understand how the British economy compares to that of non-domestic economies. No economy is independent, so it’s important to keep updated on a range of different variables that affect your financial situation!
Optimising the Average Wage
The most straightforward way of truly maximising and utilising your budget – whether you’re on the average wage or minimum wage – is to make a realistic budget: and stick to it.
It’s all well and good creating a nice annual budget spreadsheet that allocates your funding for the year, but it doesn’t mean anything unless you actually stick to it. This is precisely why you need to be realistic when you create your budget. Will you’re ‘going out’ fund really not surpass £50 for the month?
If you’re going over you’re budget every time, once that first line of defence is broken, all further spending caps become just as breakable. Therefore, you need to budget according to what you think you can afford and what you think you can stick to. Allocate yourself an extra £20 per month if you think you can stick to it, rather than breaking your original £50 budget and blowing another £50 once you’ve broken it.
Of course, this isn’t easy – it will probably take some trial and error to really get it down. After a few months, however, you might just find that you have the perfect formula for financial management. Once you have a clearly defined budget that you can adhere to, you will find that projecting your long-term spending and saving becomes much easier. It’s significantly easier to hit a savings goal when you know how much you can save each month and how long it will take you to get there. And remember: saving money is important, but so is living! You need to include things that bring you a sense of joy, relief of happiness within this budget, whether it be a Netflix subscription, a gym membership fund or a few cinema tickets.
Managing money isn’t easy. When you start out, it seems like everyone else knows exactly what they’re doing and you’re the only one who doesn’t. The reality is: we’re all winging it! Some people managed to figure out their own method faster than others, but that doesn’t mean you should give up hope.
The average wage in the UK does not permit ‘generational wealth’, but understanding your income and learning how to make the most of it can really help you navigate the complex financial landscape in a period of absolute uncertainty.