With many people having to tighten their belts, as the cost of living rises but wages stay the same, it’s becoming increasingly important to manage finances properly. Some people are great at it, but others struggle to get the most out of their money. Here are 5 quick tips that you can use to manage your finances better.
#1 Set Goals
It’s always important to have something to work towards, so before you do anything else, it’s a good idea to set some goals for yourself. This will help you to be motivated. Some of the things that you might want to target are the clearing of debts, saving up for something, or tidying up your outgoings. Yourwealth.co.uk is a great resource for finding out about financial products such as mortgages and pensions.
#2 Make a Budget
Budgeting is very important indeed. Without one, you don’t fully know where your money is going, and what’s coming in. Failing to understand this is one of the main reasons for people getting into debt and spending more than they should. A basic spreadsheet is all you need, and it’ll help you work out exactly where you stand each month.
Saving some money is always a good idea, whether there’s something large you need to be able to pay for, or to have an emergency fund. There’s no need to save more than you can afford, and anything that you’ve got tucked away will help. Many people recommend having enough money to live on for three months in the event of an emergency. Don’t be tempted to dip into savings unless you really do need them.
#4 Manage Debts
Debts can be costly, which why it is imperative that you manage them properly. Avoid paying interest where possible, by paying things off early. You should also endeavour to find the lowest interest rates for the debts that you do need. Consider changing credit card providers if one offers a more favourable rate, and always ensure you’re using the cheapest line of credit.
#5 Don’t Overspend
It’s all to easy to spend a lot more money than you really need to. Consider whether or not you really need something before you buy it, and shop around to make sure that you’re getting the best deal on anything you buy, whether it’s a laptop or insurance policy.