Taking control of your finances can be challenging, but essential to avoid financial difficulty and saving for the future. Some people are better at managing money than others, so if you find it a struggle, read on for a few tips to better manage your money.
Set up a budget
Budgeting is crucial for managing finances. Without it, you can’t track spending, and it’s easy to lose control of it. How can it be done? Thanks to the modern world of technology, there are lots of apps available to help track spending. Easily downloadable onto a smart device, a budgeting app allows you to manually enter all your financial details, including income and expenditure. You can set the app to calculate all essential expenses and add a flexible option to cover non-essentials such as eating out, social events etc.
An app will usually link to your bank accounts and credit card and allows you to see clearly where the majority of money is spent and allows you to make adjustments where necessary. Essentially, a budgeting app allows you to round up any extra money available at the end of the month and place it in a savings pot or account for other things, such as an emergency fund or holiday fund.
Using an app will help you make changes to your spending habits if needed. If you identify any frivolous spending habits, even small ones, making changes will give you more money in your pocket at the end of the month. Money that can be saved for things you really want. Most apps are free and are well worth the effort.
As any sensible budgeter will tell you, preparing for emergencies is vital to avoid any financial pressure, and setting up a savings account dedicated to unexpected expenses is wise. However, this isn’t always possible, so what other ways can you deal with an emergency? Cash advance loans are a way of covering an immediate expense whilst you wait for payday. According to CreditNinja.com, taking out a cash advance is a sensible way to cover an unexpected expense as it doesn’t require a long term commitment. Although you will incur some interest charges, it isn’t the same as a credit card, and the aim is to pay the outstanding amount once payday arrives.
Saving is essential to enjoy the finer things in life. Living hand to mouth is stressful and means you never have anything left over to enjoy life.
There are a variety of saving schemes offered by banks and building societies, with certain benefits depending on your requirements. Using the budgeting app will give you a clearer idea of what you can comfortably save and enable you to apportion parts of your income accordingly.
When setting up savings accounts, it’s useful to set up automatic monthly transfers. That way you won’t forget to save, and you can learn to live within your means and not count that income as available to spend.
Choosing savings accounts with high interest rates such as an ISA is a great way of getting your money to work for you. It’s also worth remembering that it’s possible to save up to £5000, without paying interest, so this is a better option than an ISA. It’s useful to investigate the different saving options on the market.
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Some accounts are easy access savings in case you need to dip into it and others that require a notice period. Accounts that require notice are a great option if you have enough to cover everyday expenses and feel you might be tempted to dip into savings. Making smart money choices now will enable you to have a comfortable financial situation in the future.
If you are looking to invest money, you could consider savings bonds. They are a sensible way of ensuring your money grows. They involve minimal risk, but are useful if you don’t mind your money being tied up for a specific period of time.
Deal with debt
It’s very difficult to create a secure financial position with outstanding debt. If possible, concentrate on paying them off first before starting regular saving. If the debt is too much to clear, then consolidate them onto a 0% interest credit card or low interest loan. If the debt has become unmanageable, contact a debt management service who can advise you on ways to get out of the situation and steps to take.
Money management takes discipline, but will reap rewards now and in the future.