No matter what age you are, managing your finances is a life skill that everyone should try to master. Having financial control means that you can decide on where your money goes based on your goals.
Here’s a short list of ways to improve your money management…
Review your financial situation
Evaluating your financial situation is a good place to start when you want to manage your finances. It will give you a much clearer understanding of your spending habits and show what you can save and where.
This will help you to decide on how much money you can dedicate to savings, paying bills and debts and even start an emergency fund. Categorise your monthly outgoings into essentials and non-essentials. Essentials should include household bills such as mortgage/rent, utilities, insurance, petrol, debt repayments and the weekly food shop. Non-essentials are entertainment, such as monthly streaming services, video games, nights out and other non-essentials.
Be aware of your spending habits
Being completely aware of how much you spend is the first step to taking control of your finances. There are many ways to track your spending whether it’s through apps or the old-fashioned saving receipts. Tracking where your money goes can help you create a budget as this shows you how much you typically spend on non-essentials.
Create a monthly budget
Creating a budget that aligns with your lifestyle and financial goals can encourage better spending awareness and financial wellbeing. Start questioning if you need the item you are going to purchase or if you could put that money into savings or something more important in the future.
A budget doesn’t need to be restrictive for you to reach your financial goals, it could be as simple as reducing the number of take-away coffees you have a month, waiting that little bit longer to order from a website when there is an upcoming sale or simply choosing what is a priority for you at the time.
Shop around
Food shops, utilities, clothing, and other everyday items can build up quickly, especially when you purchase branded items at full price. Consider using supermarket own brand items as they are just as good as the big brands and signing up for a member’s card can also provide you with unseen deals and discounts saving you more on your weekly shop.
Managing your finances will also include saving for big purchases, especially when you are buying a home or renovating, for example electronics, furniture, and home appliances. You can save on these purchases by waiting for sales or see if sites offer discounts, are coupons. Shopping around on comparison sites are timely but worthwhile when you can save a few extra pounds here and there.
Set a savings goal
Managing your finances isn’t always about setting money aside and never seeing it again. Short term and long term goals can help motivate you to put money aside each month to reach your desired goals. Whether it be building your savings, getting out of debt, make a big purchase without needing to take out a loan or simply just having spare money at the end of the month.
Another financial goal could be creating an emergency fund. This is usually one to three months of expenses put into a savings account and is used for when an emergency or a big payment is needed. Building up your savings isn’t always a quick and easy process; it does take time and requires patience and dedication!
Get support from your mortgage
When it comes to budgeting and your mortgage, our advisers are on hand to provide you with expert advice to meet your personal circumstances. Get in touch today to have a chat about your mortgage!