Manage Your Finances Like A Pro

Managing your finances and staying on top of your spending is difficult, it’s even more difficult when you don’t know where to begin. You might be one of those people who simply believe that they don’t have enough disposable income to put any in a savings account or save anything at all in general.

We have put together our top 5 tips on saving (even saving money you didn’t know you had):

1. Create a budget | Track what you spend

Creating a budget is the perfect place to start. You should consider your monthly income and outgoings to understand what you are spending and what you don’t necessarily need to spend. There are plenty of images online which you can find to help you know where to start and how to layout your budgeting diagram.

To summarise, record your expenses on a daily basis. If you do this on a daily basis, you’re more likely to remember what you have spent. If this is done on a weekly basis you might accidentally leave things off your list and then wonder where your money has gone. At the end of the month, you can look over this to understand all of your unnecessary purchases and work out how to change it for the following month. 

Finding the best way to start saving money is hard until you have tried it and worked out which way is the best for you. So, it might take a little while to understand that unless you have saved previously. A savings account is simply just an account for you to put money in and earn interest. The interest is different for different accounts, but when choosing the bank to open your savings account with, you should try and find the highest interest rates. 

Along with this, loose change jars are always a great help when you are trying to manage your money and save up. Although, if you have used a jar to help you save before, you must be guilty of opening it up to grab a few coins once and then just continuing to do it, leading to you having no money left.

But, there are plenty of simple hacks which can help you stop cheating. For example, why not get a jar which you have to smash to open, therefore you won’t be able to just take money out of it. This will help to limit your spending. It will also make you feel motivated to put all of your loose change in it.

3. Drop unnecessary habits

Unnecessary habits could be the reason your bank account is unhappy. Are you one of those people who buy a coffee every morning on your way to work and then buys their lunch too? If so, you’re probably spending around £8 – £10 per day, which is around £50 a week. You could prepare your lunch and a coffee at home before you leave for a quarter of the price. So, even if the food you buy from the supermarket and prepare at home costs around £20, you are still managing your money wisely and saving yourself £30. Yes, it is something that requires slightly more efforts, but it will pay off in the long-run. 

4. Set your goals

You need to set some financial goals that you want to accomplish before you continue. This could be a daily goal, weekly goal, monthly goal or even a yearly goal and so on. You need to be realistic and be able to understand your income and outgoings before you start setting goals. This is because if you earn £20,000 a year, you won’t be able to save £25,000 as you simply won’t have that money.

Along with this, you also need to set real dates and stick to them. For example, write down that you want to save a specific amount for a certain length of time. You need to make sure that you don’t just brush it to the side and ignore it. 

5. Limit your debt

To be straight-forward and make it simple, there are two types of debt. There is the ‘good debt’ which is debt for things like a reasonably sized home for you and your family. ‘Bad debt’ is pretty much any type of unsecured consumer debt. This could be anything like debt from loans, credit cards or anything you borrowed which wasn’t for an emergency. Although, it isn’t always the case. Some people may have been desperate for a small fund to help them which resulted in the debt. We suggest that you only use loans or credit cards if you’re 100% sure you can pay them back. 

Linking to that, if you ever find yourself in a difficult financial situation or an emergency and need help, Simple Personal Loans offer unsecured, personal loans from £1,000 to £35,000 to help you. Apply here now to get yourself back on the right track.

If you need more advice on limiting your spending and managing your finances, visit the Money Advice Service.