Money management is deeply personal and what works for someone else might not work for you. That being said, there are some general tips you can use and adapt to your own circumstances to improve your financial control and stability. Practising healthy money habits takes a little effort, but it can transform your finances, resulting in an all-round easier life, so instead of always worrying that you need money fast, you feel safe in the knowledge that the contents of your bank account can support you.
You don’t have to try all of these tips at once – you might decide to introduce them one by one until you’re comfortable with taking on a bit of a challenge. Here are five fairly basic ways to improve your money management:
You can choose to what level you embed these new habits into your daily routine, but before long, you’ll probably be doing them without even thinking!
Having a careful and accurate budget can help you manage your money in more ways than one. It can aid your ability to make your repayments on time, increase your savings and help you feel in control of your finances – rather than feeling like your finances control you. There are so many ways to budget, but to keep it simple, just consider your income each month and your priority outgoings. These are the payments you need to make and need to ensure you always have cash for. The leftover money is your disposable income which you can choose to spend as you wish. If you have a few social events coming up, or maybe one-off bills like an MOT, you need to factor these into your budget for that month. Budgeting is a fluid exercise and something you have to keep on top of, but it can massively improve your money management and guide you towards making more informed financial decisions.
Part of the issue people find when trying to tackle money issues is that it’s often stressful and anxiety-inducing – two emotions we generally want to run away from. It’s completely understandable that money management evokes these negative emotions; it’s an emotive subject and the likelihood is that some part of your life probably suffers as a result of your financial circumstances. It could be constantly worrying about affording your rent because you work a zero hour contract, or it could be living pay-check to pay-check in permanent fear of an unexpected payment ruining your careful budget. Every time you take on a money-related task – even if it’s deciding which microwave to buy – try to do it when you’re in a positive mood or when you have enough time to fully consider the task at hand. Rushing through your money management will only increase the negativity that surrounds it.
Impulse buying can be a downfall for many people trying to take better control of their money. In a lot of cases, people don’t even realise they suffer from it. Impulse buying doesn’t just have to mean purchasing a new TV because it’s half price, even when the one at home is perfectly functional. It could mean buying a coffee as you pass a café, even if you didn’t really want one or hadn’t planned to get one. Whether large or small purchases, take an extra moment to think about the necessity of the item or service, and whether you really need it. In some cases, you might really need that coffee, but other times, it could be an extra few pounds towards something more important.
As well as thinking carefully about future purchases, it’s also a good idea to consider how your use of credit affects your budgeting. It can be easy to get a loan online in times of small financial mishaps, but it might be worth trying to save a small emergency fund where possible so you can use your savings to manage cashflow issues rather than relying on credit. Of course, sometimes you might be unable to avoid using a loan or credit facility, but you’ll probably find your money management improves the less you use credit unnecessarily.
It’s easy to want to save, but often harder to master the action of saving. Start by transferring small amounts across to a separate but accessible bank account, either when you first get paid or just before you next get paid. Slowly increase the amounts you put into savings and train yourself into spending less throughout the month on unnecessary purchases. Part of having a good money management strategy is making small changes often and slowly building up to more significant changes.
There are a few different ways to increase your savings without actually saving more than you already do. Depending on your current life circumstances, you might want to consider:
It takes time and energy to get to a place of financial stability and it’s likely you’ll face some slip ups along the way. But it’s important not to become discouraged, because every small step is a step closer to feeling in control and ridding yourself of the stress and anxiety that many of us feel when facing money-related tasks. Whether you attempt one tip or all of them, remember that practice makes progress!
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