collaborative post // A lot of people worry about their finances, and it’s something that we can’t just ignore. Whether you are in a good or bad position, it requires our attention. Even wealthy people will think about how they spend their money and how to keep it growing.
If you are constantly worried about money, you could maybe benefit from having an overhaul of your finances and seeing where there might be some issues.
This short guide will give you some helpful tips to help you get on the right track with your finances:
Defining What You Are Spending
Before you are able to make any amendments to the way you handle your money, you need to identify and define what you are actually spending your money on. A lot of people aren’t really sure of exactly where all their money goes. So, if you are going to get a handle on your finances, you first need to understand your exact position.
You start off by looking at your monthly expenses. When you are used to your money just going in and out of your bank automatically it can be very easy just to put it to one side and only look when you are looking to buy something, If you have a complete list and know how much is going out each month you will be able to clearly see where you can make changes.
If you have variable expenses such as food it’s a good idea to add up the last year’s costs and then divide it by 12. It will give you a rough idea of your monthly cost of food. This also works very well for things like clothing or eating out. It will also highlight things like how much you spend at busier times of the year such as Christmas.
Look Closely At Your Debts
Most people have got some sort of debt. So, if you do have some, try not to hide it and deal with it head-on. After you have worked out your expenses you need to create a list of all the debts that you have.
You may have already written some of these down as expenses, particularly if you are up to date with your payments and making them monthly. You should ideally create yourself a list of all the debts you owe and the amounts you owe.
Once you have this put together, you can start to look at them more closely. Organize them by the highest interest or the highest amount.
Then work out if you are able to pay any extra towards the higher interest debts to get them gone quicker. If you ever feel overwhelmed by debt, there is a lot of help available, just reach out and set up a plan today.
Have Financial Goals
Now that you have a good idea of what you spend and your debts are in control, you need to start looking at setting yourself some financial goals. It could be a simple goal of paying down your debts a year earlier than planned, saving for a holiday, buying your first house, or saving X amount towards your retirement.
Make your goals small so you are able to see yourself reach them and celebrate them. For example, you could set a yearly goal for saving X amount towards a house deposit.
Your overall goal will be to hit a certain amount in 5 years, but you want to save a different amount each month. Or you could work out how much you need to save by the time you retire and then divide it into smaller, monthly amounts.
Always Compare Prices
If you’re someone who just goes for the first price you see, you need to stop. This can be very bad for your wallet, and you can almost guarantee that you aren’t getting the best deal.
Comparing prices is one of the best ways you can start improving your financial situation. You could pay your debts off quicker, save more, and give yourself more breathing room.
One of the first places you should start is by looking at your monthly expenses and seeing if there are any ways you can reduce them.
You should look at all the services you use from your entertainment through to your utilities. When you compare these to find better deals you could end up saving yourself a fair bit of money.
Even if you can cut a small amount off of each bill, you may be surprised by how much you save across an entire year. You can compare bills like internet and TV providers, mobile phone contracts, a digital-first banking solution, energy suppliers, and more.
Could you save some money on your monthly subscriptions by reducing your plan? Or only using one service each month instead of having three different ones?
Look At Your Food Bill
Food is something that is classed as a necessity, therefore cutting down in this area could seem like a challenge. You may think that you are going to have to start buying poor-quality food or eat boring meals.
However, cutting your food costs doesn’t mean that all of a sudden need ot start living off of instant noodles or skip your fruit and veg portions.
If you focus on buying bulk and cooking at home, you will be surprised by how much you can save on your food. Often shopping in the right supermarket can make a world of difference to your food bill.
One of the ways you can stick to a food budget is by having a food plan in place. Yes, it takes some time, however, once you are used to doing it weekly or monthly, you will find that it comes with ease to plan your meals and shop around them. You will be able to easily stick to a food budget and still enjoy nice, healthy food.
These five tips should help you to start looking at your finances in a different way and start getting back on track. Do you have any other tips that could help? Please share some of your ideas in the comments.