Are you smart with your money? If you’ve hesitated or the answer is a clear no – wouldn’t you want to change that? Being able to manage your money effectively is important for securing your financial future, so why aren’t all of us doing it?
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Some people are great with their money and not only understand their financial situation, but they know how to improve it. There’s a lot to be learned from these people, so if you’re serious about overhauling your finances and making better choices, the following tips could help you. Learn from the best through the habits of people who are good with their finances.
1. They face up to the reality of their situation
It’s easy to bury your head in the sand when it comes to your finances, but doing that will only make things worse. Instead of being afraid to check your balance or open your statement, just go for it. The sooner you face up to the reality of your situation – no matter what it is, the quicker you can resolve it.
This doesn’t just apply directly to your finances, it also applies to circumstances which could affect your finances and right to work. If you’re an immigrant to the UK, for example, you should contact immigration solicitors Latitude Law to help you get your immigration status in order. Having previous debt on your record can also be an issue, so try to get all issues resolved as soon as possible to stop it affecting your finances.
2. They budget
Budgeting is an important part of managing your money, even if you’re comfortable. Setting a budget helps you to work out exactly where your money goes each month, make sure the essentials are covered while also leaving you with money to save and live. You can start a budget at any time to help you manage your money more effectively. Start by writing down all of your outgoings and identifying where any cuts can be made. By learning to budget now, you’ll be better equipped to handle periods of financial difficulty, where you might need to reduce your budget to cover unexpected payments and costs.
3. They make payments on time
Are you ever late paying your credit card bill or phone bill? These sorts of bad habits can affect your credit rating and cause you all sorts of financial issues. The best strategy for paying your bills on time is to set up direct debits to take the money automatically each month. If you set them up to come out on your pay day, then you’ll be in a better position to manage your money for the rest of the month.
4. They’re good bargain hunters
Are you guilty of paying the first price you see? Yes, it’s more convenient to shop this way, but you could be missing out on saving hundreds of pounds each year – enough for a holiday or to cover Christmas! Familiarise yourself with various online shopping tricks that can help you save on everything from your insurance to your grocery shop – there are many different ways to save and it takes no time at all to do it. Always do a check elsewhere before you settle for a price, there’s bound to be a discount code out there that will save you some money.
5. They save
Savings are important for both the short-term and long-term, helping you to deal with life’s unexpected challenges. It’s wise to have different savings pots, including easy access savings as well as ISAs and similar savings products to help you grow your money over time. Even if you only save a small proportion of your earnings, it’s better than having no savings at all.
6. They don’t get themselves into unnecessary debt
It’s easy to want to live in the now, but sometimes doing so can come at a price. Instead of putting everything on a credit card and paying it back later, people who are more sensible with their money will save for the things they want instead. That’s not to say that you shouldn’t have a credit card at all, as being able to pay your balance on time and using your credit sensibly can help you to improve your credit score. Look for the best interest rates and cashback credit cards to help you get the most from your spending.
7. They invest
Investing is a great way to grow your finances and help you to plan for your future. Anyone can learn how to invest, and there is a wealth of advice out there to help you invest successfully for the first time. You could invest in property, invest in stocks and shares or invest in startups – there’s a big choice of investments out there, and you could be growing your savings ready for your future plans. Speak to a financial adviser about your options and get the ball rolling.
8. They keep up to date on financial news
You don’t need to have your nose buried deep in the daily newspaper to get a grasp of what’s going on in the financial world, but it does help to dip into financial news from time to time. Reading the financial news can tell you about the latest developments about things like house prices or interest rates, helping you to become more informed when making important financial decisions. Financial news can also include personal finance news, which will give you more digestible information about savings, how to save money as well as deals that are taking place. The BBC’s Your Money news section is a great website to bookmark to get your fix of the financial issues that are relevant to you.
Whatever your current financial situation, it’s never too late to improve it. Start by taking a long, hard look at your finances and set yourself some goals to help turn things around. Adopting some good habits will soon put you in control of your money so that you can look forward to a happy and bright financial future
*this is a collaborative post