Smart Money Management Tips
Keeping an eye on your budget can be a stressful business —but it doesn’t have to be. Tracking various incomings and outgoings can feel like you are spinning plates at times, so how do you avoid it all coming crashing down around you and ensure that you have good money management. These sensible money management pointers can steer you in the right direction.
Cut down unnecessary costs
Identifying where you can trim your spending is the first port of call. Looking through your bank statements will help you to spot where your money is going most regularly. You’ll also be able to see whether those expenses are essential or otherwise.
These cuts could be made from relatively simple areas of your life. For example preparing your lunches at home rather than nipping to the shops for your sustenance every day at work.
Or what about that magazine subscription you’re still paying for but never read? Or that gym membership that leaves your account every month despite no sign of a treadmill in recent memory? Cutting unnecessary costs could make a huge difference to your financial situation. The Money Advice Service offers a useful budget planner to help you on your way.
Shop around when it comes to household bills
According to the Department for Business, Energy and Industrial Strategy, over 5.4million people in Great Britain switched electricity supplier in 2018, while those who changed their gas provider totalled 4.5million — both figures showing increases from the previous year.
It can be a daunting process but scouring the market for the best deal really can help you make a significant saving. And there are other ways to curb your household spending, too. For example, taking more showers than baths will help keep your water usage down. The same goes for switching to a more efficient shower unit.
Similarly, turning down your thermostat — even by as little as one degree — could make a substantial difference to your heating bills.
Make it a team effort and employ a Plan B
Involving your family can act as a huge support in the budgeting process. Sitting down together, exploring your options carefully and mapping out a plan will help everyone understand where savings will be made. You’ll also be able to see how much money you’ll have left over to treat yourselves.
Additionally, the use of a spending diary could help you keep track of your finances and would encourage everyone to uphold their part of the bargain.
Of course, there is always the possibility of unforeseen circumstances that result in a nasty, unexpected outlay. Once you have a handle on your spending, put a small amount away to help in emergency situations. This will go a long way to easing your money management concerns.
Another great plan B option is to save up an emergency fund. An emergency fund is a financial buffer. In the event that you have a personal financial dilemma, an emergency fund will allow you to cover the cost.. While an emergency fund won’t solve all your money problems, it’s a great start to giving your finances a safety net!
Make your Money Work for you
Automating your payments and savings. Make sure to pay off any bills on time (set your bills up to be taken the day after payday), this way you’ll improve your credit score and avoid any late payment charges. Set up a direct debit to move a comfortable amount each month into a savings account.
Shop around for the best bank accounts (you can usually get a good bonus for switching too!). It’s also worth moving your savings into an account with a good interest rate, while interest rates aren’t great right now, it is still free money!