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Abigail Foster has said that managing money doesn’t have to be intimidatingCredit: Anna Fowler @annafowlerphotog 4<\/p>\n Abigail Foster with former prime minister Rishi SunakCredit: Instagram @abigailrosefoster<\/p>\n The chartered accountant who has worked with some of the biggest businesses in the UK<\/a> believes money doesn\u2019t have to be intimidating and financial literacy can change lives.<\/p>\n Abigail says: \u201cMoney is more than just numbers in your bank<\/a> account or cash in your wallet.<\/p>\n \u201cIt influences nearly every decision we make, from our daily coffee runs to the long-term goals we set for ourselves.<\/p>\n \u201cImagine a world where financial knowledge is common, where people understand the basics of budgeting, saving, investing and managing debt<\/a>, no matter their background.\u201d<\/p>\n So in a bid to help the nation, Abigail, author of The Money<\/a> Manual, has shared some of her best money tips – including the exact steps you should follow on payday and how to borrow wisely.<\/p>\n What you should do on payday<\/p>\n Allocate to essentials <\/strong><\/p>\n Once your money lands in your account, allocate funds to your essential spending, such as rent, mortgage<\/a> and bills. <\/p>\n Even if these are set up as direct debits, take a moment to mentally or physically track what\u2019s been paid and what\u2019s coming out.<\/p>\n Automate your savings<\/strong><\/p>\n Pay yourself by setting up an automatic transfer to your savings<\/a> or investment account. <\/p>\n By automating it, you ensure that you\u2019re building wealth before spending on non-essentials. <\/p>\n No matter what the amount, this habit will give you peace of mind and financial stability.<\/p>\n Martin Lewis urges workers to check the tax code on their payslips for a simple mistake that could cost you hundreds of pounds<\/p>\n Track your spending<\/strong><\/p>\n Use a budgeting<\/a> app, spreadsheet or even a notebook to keep tabs on where your money goes. <\/p>\n Tracking helps you stick to your plan and adjust where needed.<\/p>\n Create \u2018spending buckets\u2019<\/strong><\/p>\n Divide your remaining money into categories, like entertainment and birthday gifts, so you know exactly how much you can spend in each area.<\/p>\n This prevents the \u2018leftover\u2019 money from disappearing into thin air.<\/p>\n Stress-test your budget<\/strong><\/p>\n Consider what would happen if an unexpected expense or a dip in income occurred.<\/p>\n Building a buffer into your budget for unplanned costs gives you extra security, helping you stay on track when things don\u2019t go as planned.<\/p>\n Check you tax code regularly<\/strong><\/p>\n It’s important to check your tax code regularly because it tells your employer how much tax to deduct from your pay.<\/p>\n An incorrect tax code can lead to either underpayment, potentially resulting in a future tax bill, or overpayment, meaning you’re missing out on money you’re entitled to.<\/p>\n Your tax code should be clearly displayed on your payslip.<\/p>\n What your tax code means <\/p>\n Abigail Foster’s guide to understanding your tax code<\/p>\n Tax codes are one of the most important details when it comes to how much tax you\u2019re paying, as they tell HMRC how much of your income is tax-free each year. How to avoid the scammers <\/p>\n Keep up to date with scams by looking at Which? for scam alerts<\/a>, Citizens Advice \u2013 Scams Action and even your bank, who should be keeping you up to date with any prevalent ones.<\/p>\n Scammers are becoming increasingly sophisticated with AI<\/a>, allowing them to create ads that appear as though they\u2019re endorsed by specific people.<\/p>\n The key rule here? If it\u2019s unsolicited, it\u2019s probably a scam. <\/p>\n I never DM first, and neither will any reputable financial expert or institution.<\/p>\n Phone providers will never ask for a code over the phone. If you receive a call with this request, it\u2019s a red flag. <\/p>\n Hang up immediately and call the phone provider directly to report the incident.<\/p>\n Borrow wisely <\/p>\n Borrowing for things like education<\/a> or a home can be smart, while debt for short-term wants can become a burden if not managed well.<\/p>\n Credit cards<\/a> can be useful and a good way to increase your credit score. <\/p>\n Look for one that offers perks such as cash back, points, insurance<\/a> or travel perks.<\/p>\n The key with a credit card is that you pay the balance off each month and keep your spending low.<\/p>\n For example, if your credit card limit is \u00a31,000, spending \u00a3100 a month and clearing it, will help your credit rating.<\/p>\n A perk of using a credit card is Section 75 protection. It means that the credit card company shares liability with the retailer if something goes wrong with your purchase, whether the product is faulty, doesn\u2019t arrive, or the company goes bust.<\/p>\n In these cases, you can claim your money back from the credit card company.<\/p>\n I would always recommend using a credit card for anything expensive, such as a new phone or computer, as you\u2019re protected in case something goes wrong.<\/p>\n 4<\/p>\n Abigail Foster says Brits should stick to borrowing for important purchases not short-term wantsCredit: Getty 4<\/p>\n The money expert has shared her tips for managing financesCredit: Anna Fowler @annafowlerphotogHow to pay off debt<\/p>\n The snowball method<\/strong><\/p>\n This method taps into the \u2018reward\u2019 centre of your brain. <\/p>\n Once you\u2019ve covered the minimum payments, throw any extra money at the smallest debt. <\/p>\n The idea is to knock out the smallest debt quickly, giving you a sense of accomplishment that propels you forward. <\/p>\n Once that debt is cleared, you move on to the next smallest, and so on. <\/p>\n The motivation from these small wins can be powerful.<\/p>\n The avalanche method<\/strong><\/p>\n This method focuses on tackling the debts costing you the most. <\/p>\n After making the minimum payments, focus on the debt with the highest interest rate. <\/p>\n This approach saves you more money in the long run because it reduces the amount you\u2019re paying in interest each month. <\/p>\n The downside is that it might take longer to clear the first debt, but the financial benefits make it worth the wait. <\/p>\n Typically, high-interest debts come from things like credit cards or payday loans. <\/p>\n If you\u2019re grappling with these, you might also consider 0 per cent balance transfer cards as an option to stop interest<\/a> from piling up while you work on paying them off. <\/p>\n Just be cautious of any fees or conditions associated with these offers.<\/p>\n For larger debts, like mortgages or personal loans, keep an eye on early repayment fees.<\/p>\n Some lenders penalise you for paying off loans too quickly, so check the terms before making extra payments.<\/p>\n Keep an eye on inflation <\/p>\n Knowing how inflation works and how it impacts your life can empower you to make informed decisions to protect your finances.<\/p>\n Broadband services, for example, are part of the Consumer Prices Index (CPI) inflation \u2018basket\u2019, and providers are often allowed to increase fees each year, sometimes above the general rate of inflation.<\/p>\n Common tax code questions <\/p>\n Abigail Foster answers your common questions <\/p>\n Why might my tax code change?<\/strong> What if my tax code is wrong?<\/strong><\/p>\n Check the HMRC app. It\u2019s a great tool to see your tax code and find out exactly how it\u2019s been calculated.<\/p>\n If something still seems off, contact HMRC directly. They\u2019ll be able to explain why your tax code is what it is and make corrections if necessary.<\/p>\n If HMRC confirms they\u2019ve sent the right information to your employer and you\u2019re not seeing it reflected, speak to your payroll or HR team.<\/p>\n So, while inflation might be reported at 3 per cent, your broadband bill could go up by 6 per cent or more.<\/p>\n Since these price hikes also push inflation higher overall, it becomes a vicious cycle.<\/p>\n There are campaigns to cap these increases, but in the meantime, you can take control by:<\/p>\n This is an edited extract taken from The Money Manual: Everything You Actually Need to Know About Personal Finance by Abigail Foster (Ebury Edge, \u00a316.99) published on 22 May<\/strong><\/p>\n Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk<\/a><\/strong>.<\/p>\n![\"Portrait](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/www-instagram-com-p-c92jxloozry-995248663.jpg\")
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The numbers in your tax code represent your personal allowance.
For example, the code 1257L\u00a0 \u2013\u00a0 the most common tax code \u2013 means you can earn \u00a312,570 before income tax kicks in.
If your tax code is 1250L, this means you have a slightly lower personal allowance (\u00a312,500).
Maybe you\u2019ve claimed tax-deductible expenses, or HMRC is recouping underpaid tax from previous years.
If you see 0T, that means you\u2019ve used up your personal allowance or don\u2019t have one, and you\u2019ll pay tax on all your income.
The letters in your tax code give HMRC extra information about your tax situation.
Here are some common ones:
L <\/strong>\u2013 Standard tax code for people entitled to the basic personal allowance.
T <\/strong>\u2013 Emergency tax code, used when HMRC doesn\u2019t have full information about your income (such as when you change jobs). It means you might pay too much or too little tax until it\u2019s corrected.
S\u00a0<\/strong> \u2013\u00a0 For residents of Scotland who have different income tax bands.
C <\/strong>\u2013 For residents of Wales, reflecting Welsh income tax rates.
M1 <\/strong>\u2013 (month 1) \u2013 A \u2018non-cumulative\u2019 tax code, meaning tax is calculated on a monthly basis rather than taking into account what you\u2019ve already earned this year. It\u2019s often used when you start a new job.
D0<\/strong> \u2013 Income taxed at the 40% tax rate
D1 <\/strong>\u2013 Income taxed at the 45% tax rate
Marriage Allowance Marriage Allowance is a tax break for married couples or civil partners, allowing one partner to transfer up to 10 per cent of their personal allowance to the other.
It\u2019s particularly useful if one partner earns less than the personal allowance threshold.
N <\/strong>\u2013 If you transfer 10 per cent of your personal allowance to your spouse.
M <\/strong>\u2013 If your spouse has transferred 10 per cent of their allowance to you. For example, if your partner doesn\u2019t earn enough to use their full personal allowance, they can transfer a portion of it to you. This can reduce your tax bill and leave you with more money in your pocket.<\/p>\n![\"Woman](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/close-mid-section-young-asian-954519114.jpg\")
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Underpaid or overpaid tax: If you\u2019ve underpaid or overpaid tax in previous years, HMRC might adjust your tax code to either collect what you owe or give you a refund.
Marriage allowance: If you\u2019ve transferred or received part of a spouse\u2019s allowance, your tax code will reflect this.
Savings or other income: If you have additional income from savings or investments, HMRC can adjust your tax code to account for the tax owed on this extra income.<\/p>\n\n