The mere thought of money fills many of us with a sense of dread. Indeed, a third of Brits would say that this brings them the most stress in their life. If your heart sinks every time you think about the state of your finances, then it’s time to grab things by the scruff of the neck and take control. If you can manage it, you’ll feel a good deal happier about life. Think it’s easier said than done? Here’s how to manage your money effectively…
Get your act together
First things first, you need to understand the current state of your finances. How much money do you have coming in? How much do you spend on bills and essentials? When do your bills come out? How long have you got left to pay any loans off? What do you spend on extras?
Go through each of your last three monthly bank statements (three ensures that you don’t miss any quarterly bills) and make sure you know the answers to all of these questions. Put all of that information into a budget planner (there are some examples here) and use this going forward to help inform your financial choices.
Knowledge is power
Once you’ve got this information, you’ll be fairly well informed about the state of your finances. It’s important not to slip from this by keeping track of your spending. Use your bank’s app to keep an eye on your account or, if you wish, download a tracker app so that you can log your spending on the go.
The more you know, the more you can stay in control. If you’re out shopping, it helps to be up to speed on the state of your accounts so that you can make informed spending choices.
Cut unnecessary spending
While you had your own ‘spending audit’ you might well have noticed a few bills that were higher than you expected or a few bad spending habits that you want to cut out. Use this as inspiration.
Whether that means shopping around for a better deal for your utility bills, cancelling a subscription that you never use or maybe cutting out that morning coffee on your way to work every day – you’ll feel the benefit in the long run. Being in control means being aware of every pound you spend, and being happy that you’re getting a good deal.
Make your money work harder
Speaking about good deals, what your savings? With interest rates for current accounts and most savings accounts at rock bottom rates, you’re probably not getting a good deal if your cash is kept in either of these places.
Take a more active approach to your personal finances by looking at ways to make your money go further. How far you go with this will depend on how experienced or confident you are with investments. You could lock cash away in a fixed term savings account, look into a stocks and shares ISA or go further and consider products such as CFDs.
Once you’re making your money go further, you’ve had a thorough audit of your finances and you’re on top of what you’re spending and where, you’ll have the control you crave and needn’t feel so worried about your finances.
