Managing our finances can come easier to some than others, and some of us may feel we need to brush up on our knowledge when it comes to handling money. Well, if that’s the case for you then take a look at the following guide we have put together. It features advice and guidance for how to improve your spending, saving, and increase your income. Read on if you’d like to learn more.
Create A Budget Plan
The first step in better understanding your finances is to create a budget plan. The purpose of a budget plan is for you to be able to more clearly track and control your habits surrounding money. It also allows you to create a plan for the month of how your income will be spread out. To create a budget plan, go through any documents you may have that cover outgoings such as bills, receipts, and the like. You can also use your banking app for this if you have one as it will usually list your outgoings made on your card. Work out how much of your income is going on what, and whether you need to spend as much as you are on certain things. Of course, no two budget plans will look the same, as everyone prioritises different things. From there you can create separate sections to your budget plan such as shopping, bills, direct debits, savings, and spending money, and how much you aim to spend on each going forward.
Cut Down On Unnecessary Spending
By studying your budget plan, you’ll be able to see areas that you may be overspending on, such as meals out or shopping. You can then make arrangements for how you’ll try and save money in these areas. For example, set yourself a smaller budget for certain things and stick to this for the month. If you know on a certain month you may be spending more than usual (like on a holiday) then you can plan to cut back on other financial areas to help you save money. If you enjoy nice meals out or takeaways, consider cooking from home more often. This also allows you to budget better as you can plan how much you want to spend on the food shop in advance, which can last you for the coming week or two.
Cancel Some Direct Debits
Another way to save money is to have a look through your direct debits and see which you don’t make the most of or really need. This could include things such as TV subscriptions, gym memberships that aren’t used, and magazine subscriptions. Direct debits may not cost much individually, but when they are added up and get taken out each month, they can really affect your ability to save and control your money.
Take Out Loans
If handled responsibly, loans can help you out financially when needed. If you’ve had an unexpected payment that you can’t afford until you’ve been paid, sometimes taking out pay day loans can help you to overcome a financial bump in the road.When taking out a loan it’s important to make sure that you will be able to pay it off within the specified timeframe. Therefore, pay day loans should only be considered as a short-term option, when you know you will be able to pay it back relatively quickly. For longer-term financial support, other options should be considered.
Explore Passive Income Streams
If you’re looking to boost your income, but you’re not willing to change jobs, then it’s worth considering setting up some form of passive income. Passive income is money that flows in for you without requiring constant or much work on your part. It’s ideal to have a form of passive income running alongside an existing job as it will allow you to boost your income without taking too much of your attention away from your day job. There are a number of different options to consider when it comes to setting up a side-hustle. So, give the process plenty of thought before choosing what to do, and consider the different options out there and which would fit best into your lifestyle and interests. For example, if you have the time and enjoy writing, you could look into becoming a freelance writer. Or if you’re bilingual, you could consider part-time language tuition.
Another way to boost your income is through investment.This can take a number of forms. For example, you could invest in stocks and dividends. Or if you’re good at DIY, you could invest in property development. The best way for you to invest is through choosing something you have good knowledge of already. Or if you’re interested in getting into an investment, make sure to do plenty of research first or get advice to make sure you make wise investments.
Knowing And Improving Your Credit Score
Your credit score is the number you are given based on your credit history. It can be affected by whether you are in debt, whether you pay bills on time, and your ability to manage your finances well. Your credit score will be what lenders use to decide whether or not to lend you money. It will also affect the rate of interest lenders will charge on the money you borrow. You can find out your credit score through online credit score calculators. You simply have to answer a few questions and it will search through your credit history and give you your score based on this. If you wish to improve your credit score, you will need to ensure you’re doing the following:
- Pay bills and direct debits on time
- Avoid credit checks from various lenders
- Using a credit card WISELY
How Can Credit Cards Be Used Wisely?
Credit cards need to be used carefully in order to benefit from the increased credit score they can provide. It can be incredibly tempting to overuse credit cards and buy things we can’t afford. If you’re going to be using a credit card you will need to be strict with yourself and control the spending on it. A good way to use credit cards is by using them to spread the cost of something. For example, buying something you know you can easily break up into payments over a few months. If you’re going to be using this tactic, then make sure to only be paying off one purchase at a time, so you can keep on track of what you’re paying off more easily. You could also use credit cards to make small regular payments such as shopping, and then pay it off immediately upon getting paid. It will depend on the card provider you choose as to how much interest you get charged and what bonuses you can receive, so make sure you do your research before choosing a provider.
Seek Expert Advice
If you want to have the best knowledge and control of your finances as possible, it’s worth hiring a qualified expert financial advisor to go through your finances with you. They will be able to give you tailored advice and financial solutions according to your personal situation. An accountant will be able to give advice when it comes to sorting and paying taxes.