We’re living in a time where more of us are more conscious of money and finances than ever. Following the Covid-19 pandemic, many of us found ourselves in difficult financial situations, with unemployment and job loss rising. This has then been paired with a cost of living crisis, which has seen the price of essentials including housing, fuel, energy and food skyrocket. We’re having to be more cautious with our spending than ever in order to focus on providing and covering the basics. Right now, you may be wondering how to best manage your finances. Here are some tips that will allow you to manage your money in the most responsible way possible!
Plan for the Worst
This isn’t the most positive point, but it is a realistic one that will help to prepare you and your dependents for worst case scenarios. If you need to draw on it, you will be prepared and manage more easily. If you don’t, you’ll be stress free regardless. It’s generally recommended that you take out a number of different types of insurance to protect you and your family financially. Home insurance, contents insurance and life insurance are all good examples. You should also make sure to work with an estate lawyer to make sure there are clear rules laid down for managing your estate should the worst happen too.
Now, onto budgeting. It is absolutely essential that you live to a budget. There are all too many people out there who are paid each month and simply dip into the money in their account until it is gone. This should be avoided, as it can result in overspending early in the month and issues with bills bouncing or going unpaid later in the month. Instead, take your total take home pay and make sure to deduct the cost of essentials, such as your rent or mortgage, energy bills, food bills, car bills and more. The amount you’re left with is your disposable income and you need to make sure that you aren’t exceeding this at any time. This will prevent you from falling into debt.
If you’re already in debt, you need to make it your focus and priority to clear it. Most debt comes hand in hand with interest, which simply means you’ll end up paying a lot more than you borrowed in the first place – especially when debts are left untouched for a long time. Look at your budget and determine how much of your disposable income you can commit to paying off debt each month. Look to see if you can find interest free balance transfers or low interest debt consolidation loans. See whether you can generate any additional income to chip away at your debt faster. The sooner it is cleared, the better.
These are just a few tips and tricks that can really help you out when it comes to managing your finances as responsibly as possible. Following the advice above will not only help you out, but it will benefit any of your dependents too!