Getting to grips with your finances is an essential step in our lives. Many of us have experienced money worries at some point. Yet, many of us find ourselves getting to a point where we feel as though a weight has been lifted, whether it’s due to paying off expensive debts or getting a new, higher-paying job or promotion at work. But just because you’ve now got more money coming into your bank account than you’re used to doesn’t mean you should be letting your spending increase and getting complacent. You’re now in the perfect position to start fortifying your earnings and ensuring that you reduce the risk of returning to that exact position of concern. Here are our best tips for how you can strengthen your financial situation today.
Write Up A Budget
Just like a business, we can create our own budgets to get a better idea of our expenses as well as what we have leftover for savings and discretionary spending. Putting together a budget is very simple and can be very useful. One of the most stressful situations we can find ourselves in when it comes to our money is being caught out by an unexpected payment. Using your budget, you’ll be able to identify any unnecessary payments such as subscriptions that you don’t use anymore and ensure you’re putting that aside with any other savings to make sure you’ve always got something ready for these events. It’s never nice to have to spend your savings on emergencies like this, but it’s far better to do so than be unable to pay due to poor planning and budgeting.
Make Smart Purchases
Most of us are guilty of buying things we don’t need, and generally, this is okay. If a purchase makes you happy, nothing is saying we can’t buy these things every now and again as a treat. However, sometimes we can find our spending getting a little bit out of control, and it’s at times like this where we can really benefit from spotting this and reining this bad habit in. Not only this, but it’s very easy to spend premium prices for branded goods when own-brand items are often just as good for about half the price or even less. Adding that extra time by comparing these prices and making calculated decisions when shopping can feel boring and tedious but try to do this every now and again where possible. You’ll find that, by doing this, you’ll not only be able to get more food and essentials, but you might even have some extra cash left over at the end of the month.
Active Saving
Occasionally, after having a month of careful spending or even just being too busy to get out and spend, we can find ourselves with some savings left over. This can go directly into a savings pot and we won’t feel the impact of hiding that money away after being paid again. However, this method of saving is wholly unreliable, and while it’s great to have some extra cash to put away at the end of the month, it’s even better to set some of our paychecks aside for savings actively. Nothing is stopping you from dipping into this as a buffer but you’re better off seeing it as untouchable unless for emergencies. A great system for this is to follow the 50/30/20 rule in which you allocate 50% of your income for necessary payments like bills and groceries, 30% for your own discretionary pot which can be spent on luxuries, and then 20% set aside for your savings.
Find Some Cash-Boosting Methods
One of the best ways to strengthen your finances is to make even more money. This isn’t a necessarily greedy stance, however. You can use any extra income to allow you to meet your savings goals or even to surpass them. But what are the best ways to do this? The chances are, you’re already swept off your feet at work and adding another job to your already hectic lifestyle might sound entirely unwise, as it could be a risk to your current role. But there are plenty of things you can do to earn some extra money without taking on extra stress. Using Lebara’s refer a friend for example, can help you to earn cash online by simply referring people you know to sign up for one of their SIM-only plans. Once they sign up at Lebara, you will earn up to £50, depending on the plan they choose. While it’s not a guaranteed, stable income, it is a system where you can add a bit of extra cash every now and again to your monthly salary, which can be very helpful.
Only Borrow If You Have To
Loans are not inherently bad. Getting a loan can in fact be a very savvy financial decision, but only if you know for certain that you can pay it back and have a plan to do so. For example, getting a mortgage to buy a house as real estate generally increases in value and you’ll eventually be able to profit from that house as you pay off that mortgage over time instead of throwing your money into the pocket of a landlord. But getting a loan out and burying your head in the sand while not worrying about the consequences is a very unwise idea. Loans with high interest rates, especially those from payday loan sites, can devastate your monthly income and get you into severe financial trouble. If you’re having to borrow money to handle essential payments, for example, this could significantly exacerbate your problems. Instead, it’s worth speaking to a financial advisor at your bank if you’re struggling as they’ll be able to offer you advice that you may not have known about.
Get Better Deals
Similar to comparing your groceries, it’s important to try to find the best deals on your monthly purchases. Having subscriptions coming out of your budget, especially ones you don’t use, is extremely wasteful. First, you’ll want to go through and cut out any that you don’t need to instantly see a reduction in your expenses. Next, you’ll want to identify any other alternatives you could opt for which can provide you with what you need at a lower cost. As well as these monthly payments, it’s worth searching for the best deals possible on one-off payments such as flights, using comparison sites, and large purchases like new appliances such as TVs and refrigerators.
Consider Investing
Lastly, if you’re looking for something to use your savings for, it might be a smart idea for you to start investing that money instead of leaving it in a savings account. It’s important to note that savings accounts, most of which have incredibly measly and frankly insulting interest rates, will rarely beat rising inflation. Leaving your money in one of these accounts will see it losing value. Whereas, while the risk can be high depending on the type of investment you make, putting your money into stocks or bonds can see you at least maintaining the value of that money alongside inflation. Of course, there are two other outcomes here too. Either you’re going to be making a profit, possibly making you very wealthy if one of those investments turns good, or you’re going to be losing some of your money. The best piece of advice here is to never invest what you can’t afford to lose.
