Sometimes making sure your money works as well as it can for you can seem a major challenge. In the face of bills, expenses and different pressures on yours and other household income, sometimes the idea of investing for the future or saving for retirement may seem almost fanciful.
Some judicious yet simple steps could make all the difference and above all put you in proper control of your finances.
1 Set a budget
It can often be a shock to see your basic ‘money out v money in’ summary on your bank statement and how much leaves your account every statement period.
A simple budget can soon show you where your money is going each month and may highlight ways you can save. Keep receipts and diligently log your expenses and income and see what the balance is at the end of each month.
Set up a budget that suits you either electronically or using old fashioned paper and pen.
2 Audit
Setting a budget is one thing, but know if you can keep to it is another. That’s where a spending audit comes in. Go through your last few bank statements line by line to identify exactly where your money goes.
3 Cut your spending
This will then allow you to identify areas where your level of spending is too high. Whether it’s a costly utility bill or a mobile phone contract that has crept up in cost – you can identify items and look at cut them in part or full.
4 Shop elsewhere
What about your essentials? Take a look at your food shop and look for ways to switch to cheaper alternatives – either within your favourite shop or by taking your custom elsewhere. Many of us slip into spending habits that are unwittingly costing us more than they should when it comes to groceries. Small changes can make a big difference when they relate to something you spend every week.
5 Investment options
If you have some spare money to invest, or have some investments currently, then looking into them might be worth considering. This is much easier than it used to be thanks to online platforms.
With the amount of information online, you can soon learn about other investment options that might suit you. For example, if a highly leveraged investment involving lower deposits is of interest, then CFD trading (Contract for Difference) could be worth investigating; trading specialists are a good source of information.
6 Set up an emergency fund
To insure against the sudden and unexpected need to find a sum of money – say for a major car or house repair expense – build up an emergency fund. This might save you from needing to borrow money and pay back interest. Even a small amount set aside each month or every other month can provide you with a little financial security. It doesn’t have to be a bespoke account – adding to your savings could be just as beneficial and help you to earn interest on your money.
7 Sensible decision making
Of course certain things are essential purchases, but try to adopt a few good habits when buying things in the ‘want’ category as opposed to ‘need’ – it’s all about avoiding temptation.
For example, if tempted by an impulse purchase when out and about, it’s a good habit to delay the purchase for one day to see if you still want it. Next day, if you’re still keen and would go back to the store then maybe treat yourself – if not you’ll have saved some money.
8 Buy to last
When is a bargain not a bargain? Sometimes the cheapest items – be they kitchen accessories, child’s toys or items of furniture – aren’t always value for money if they won’t last you as long. Buying a quality product that can last for a long time might prove cost effective in the long run.
9 Cut bad habits
There’s nothing wrong with treating yourself from time to time, but cutting one or more habits out of your routine can improve your finances. Cutting one visit to the pub or coffee shop a week can bear fruit, freeing up funds that can be diverted to your other spending priorities.
10 Review regularly
Get into the habit of regularly reviewing your finances. Don’t just have one blitz and leave it at that. Along with maintaining an ongoing budget, keep checking expenses and analyze different investment options. If it helps, set a date every six months and repeat some of the steps above to identify new savings or investment opportunities.
