With a few new changes to how you approach your finances, you can enjoy a better relationship with your money, and nurse your bank balance back to fiscal health. Here are just some of our recommendations…
One Thing At A Time
Trying to do too much too quickly, and becoming overwhelmed, is one of the most common mistakes, when trying to improve your finances. List your fiscal goals and then prioritise them. Tackle each objective one at a time – find a focus. For example, this could be paying off all of your credit card bills and then deciding to only use your debit card from now onwards, in order to avoid sailing into debt.
Track Your Spending And Audit Your Bank Balance
At least once a month, go through your bank balance’s transactions to assess your earnings and your losses. Mercilessly record any improvements that you can make to reduce your outgoings and keep an eye out for any potentially dodgy transactions that you can’t remember making. It’s possible that someone is illegally taking money from your account; don’t become a victim of fraud and report anything suspicious to your bank.
Work Towards An Emergency Fund
Who has the extra money to make an emergency fund these days? You, that’s who. Whatever you can spare, put in a savings account, so you have some separate funds to fall back on, if things go wrong (you unexpectedly lose your job, for example, or you have a sudden expensive bill to pay, such as a veterinary bill). This emergency fund could be the only cushion that saves you from debt’s slippery slope – it’s easy to fall into debt, but extremely hard to get out again.
So, you’ve decided to save money for your emergency fund – that’s great! Create a direct debit, so your savings leave your account every month. This way, you’re forced to economise, in favour of savings.
Big Money Decisions? Talk To A Professional
If you’re making out your will, getting divorced, or making plans to buy a house, talk to someone who knows the law inside and out. Don’t make the kind of mistake that will cost you more in the long-term than a simple accountancy meeting.
Have A Long-Term Plan
Short-term, quick wins do make a massive difference, but having a long-term plan for your finances – and a goal to work towards – will help motivate you to hit your targets. This could be saving up enough money to put down on a house or putting money towards your pension. Decide what you want your finances to look like in 10 years’ time, and work out the mechanics around reaching that goal.