Taking the time to manage your money better can really pay off, even if it may seem like an overwhelming task. It doesn’t have to be. A few simple steps could help reduce your stress levels and make it easier to build a more secure future for yourself.
Here are 5 tips on how to better manage your finances.
Evaluate your finances
Evaluating your current situation is a good place to start. Make note of what your monthly income is, your outgoings, spending habits, and any debts you’ve accumulated. Having a full picture of your financial situation can help you organise your spending by categorising your expenses into essentials and non-essentials. These can include household bills, debt repayments, streaming subscriptions, hobbies, and clothes, to name just a few.
Create a budget
You can use our budget calculator to work out what you could contribute to savings and paying off debts. Once you have an idea of what you can afford, find a budgeting method that works for you. One effective method is the 50, 30, 20 strategy, where you spend 50% of your income on household needs, 30% on personal wants, and 20% on debt repayments and putting towards savings.
Splitting your outgoings into essentials and non-essentials can show you where you could cut down and save, whether it be cancelling a streaming service you no longer use or reducing the amount of clothes you buy. Creating a budget with specific saving goals in mind will make it easier for you to see what money you have left over once your bills, savings and debt repayments have gone off.
Shop around
Shopping around for deals on everyday items can help save your money. For example, try to find offers at the supermarket, wait for discount codes to your favourite online shops, or take advantage of events like black Friday to buy expensive electronics and home appliances. When it comes to your utilities, there are countless comparison sites you can use to evaluate different providers and see what they offer. You may even consider switching providers if one offers something better.
Set savings goals
Work out what your reason for saving is and visualise what it would feel like to achieve it. Whether it’s a new car, a trip of a lifetime, a deposit for your first home, or a renovation project. Cementing your savings goals now can help you prioritise what you want to achieve financially both short and long term. These goals and priorities can motivate you to save extra money because you’ll find yourself asking if you really need what you’re about to buy. Ask yourself, does it fit into my visualisation plan? Will this expense now make it easier to save in the future?
Another savings goal that may be beneficial for you is to start growing your emergency fund. An emergency fund is typically around three months of income or expenses and is there as a ‘just in case’ scenario. Rather than dipping into savings to pay for an expensive and unexpected event, you can use your emergency fund to ease the pressure. Growing your savings may take time and patience, but with regular monitoring and dedication you will soon reach your goals.
Get help from a mortgage adviser
Our mortgage advisers are available to provide you with expert advice when getting your finances in order, as well as your mortgage. Get in contact today to talk about your mortgage and see how we can help.