Managing your finances can be tricky. Many people have never really got to grips with effective budgeting and sorting their cashflow so everything is always paid on time, and some end up in quite difficult situations with their money.
Below are some top tips for better money management, so read on to learn how to get your finances in better shape.
Keep spendings below earnings
Sounds simple, but most people spend more than they earn from their job thanks to credit cards, loans and overdrafts. There is nothing inherently bad about these things, but they should be used sparingly and wisely.
Stick to a monthly budget
Track all your incomings and outgoings for a few weeks and use the figures to create a monthly budget. This should include everything that you earn and everything you have to pay out for. It can be surprising to see just where your money is going.
Save for a rainy day
Even if you can only afford to put away a little bit each month, be sure to do it. This emergency fund could be a lifesaver if the washing machine breaks down or the car fails its MOT.
Give yourself spending money
Each time you get paid, put aside a little that you can use for treats for yourself. This will be your pot for takeaways, cinema visits, nights out, online shopping for new clothes and DVDs etc. If you fear it is too easy to go over this amount then change the budgeted money with a service like Ukash and use that to shop online. There are also many different budgeting mobile apps that are available that can make this process much easier.
Be aware of financial commitments and requirements for the future, both in the short-term and the long-term. This means knowing when big utility bills, car insurance etc will be due, but also thinking about health insurance and a pension.
Cut back wherever you can
Saving even a few pennies here and there can add up in the long run. Take advantage of deals in the supermarket like 2-for-1 or buy one, get one free, but do not buy them if you won’t use the products. It is fine to stock up on things like toilet rolls and canned goods when they are on offer, but too often fresh food spoils when it is bought on a deal.
Make the most of thrift shops, bargain stores, charity shops etc too.