Learn how to manage your money
Managing your money well can mean many things, from living within your means to saving for short and long-term goals, to having a realistic plan to pay off your debts. Continue reading if you want to learn how to set up a budget, make the most of your money, pay off debts or start saving.
First set up a budget
Don’t forget to include one-off expenses such as car tax and Christmas presents in your budget or tax and National Insurance if you’re self-employed.
If you want to get your finances straight, a budget is a really good way to start. It’s just a record of money you have coming in from things like your salary or wages, pensions or benefits) and payments that you make, such as your rent or mortgage, insurance and Council Tax as well as living expenses and regular and irregular spending.
Make a list such as.
Family and friends
Alternatively you can set a budget up using a spreadsheet on your computer or just write it all down on a piece of paper. Your bank or building society may also give you access to an online budgeting tool which takes information directly from your transactions.
Checking where your money goes
If you’re spending more each month than you are getting in as income, the next step is to look more closely at where your money is going and where you can cut back. Even small amounts – for things such as drinks out, magazines, sandwiches at lunchtime or takeaways – can add up.
Keep a record of what you are spending
Don’t forget to cancel Direct Debits for subscriptions or policies you no longer want or need.
Keep a spending diary it is an effective way of seeing exactly what you are spending. Try making a note of what you spend for at least a month (including even small purchases). If you can do it for even longer, you’ll get a fuller picture of what you spend your money on.
You will be able to see where you can cut down your spending
Paying off loans and credit cards
If you have loans or owe money on credit cards it usually makes sense to pay off the debt that charges the highest rate of interest first, it’s the fastest way to clear your debts. Knowing this is useful if you have several different debts charging different rates of interest, such as:
Store cards, which normally charge the highest rates of interest
Personal loans from the bank, which normally charge a lower rate of interest than credit or store cards
It is important to make sure you don’t break the terms of any of your agreements. So even if you’re focusing on paying down another debt, you must pay at least the minimum on any credit cards and your monthly required payments on any loan agreements.
If you’re overwhelmed by your debts
Often, the hardest part of paying off your debts is taking the first step. It’s easy to feel overwhelmed if you know you’re struggling financially. It’s tempting to bury your head in the sand and ignore your bank statements and demands for payment, but it won’t make the problem any better and could make it worse.
So, take a deep breath and open any letters you’ve been ignoring. Once you’ve done this, at least you’ll know what you have to deal with and you can work out what you need to do next.
Getting help if debt problems become serious is a must.
If you’ve already missed credit card or loan payments or if you’re behind with so-called ‘priority debts’ such as your rent or mortgage, energy bills, Council Tax, child support or court fines, take advice from a debt advice charity straight away.
Set a goal to save
Some people find it hard to get motivated about saving, but it’s often much easier if you set a goal. That way, rather than thinking about the money you are setting aside each month, you can focus on what you will be able to do once you’ve reached your goal.
Your first step is to have some emergency savings – money to fall back on if you have an emergency, such as a heating boiler breakdown or if you couldn’t work for a while. Try and get three months’ worth of expenses in an easy or instant access account. Don’t worry if you can’t save this straight away, but keep it as a target to aim for.
Once you’ve set aside your emergency fund, possible savings goals to consider might include:
Taking a holiday without having to worry about the bills when you get back
Having some extra money to draw on while you’re on maternity or paternity leave
Buying a car without taking out a l
Plan to save regularly
Why not pay some money into a savings account every month. If you set up a standing order the money goes straight from your bank account without you having to do anything.
Also it’s a good idea to:
Pay the money into your savings account as soon as you get paid, rather than at the end of the month
Increase the amount you save if you get a pay rise or any of your outgoings (such as your mortgage or insurance costs) fall
Check that you are getting a competitive rate of return on your savings
As your savings start to grow, you should:
Make an investment plan based on your goals and timeframes
Find the best home for your money in the longer term
If you want to find out more about your finances why not have a psychic phone reading and one of our clairvoyant psychics or mediums will tell you more.
Call now on 0207 1116383