Managing our finances can become a daunting task. In fact, many of us barely do it at all! It’s very common for people to allow money to slip away before realizing two full weeks before payday that they are officially broke! Sound like you? Don’t fear, you’re not alone, and we’re certainly not here to point fingers.
In fact, we are here to help you manage your finances better. It has become easier than ever to get control over your finances and, ultimately, reach the stage where you’re heading for not just financial security but financial freedom. In this article, we are going to discuss four ways to easily manage your finances and put you on this path. Trust us, once you get started on this financial management journey you will never go back. Read on to find out exactly how to easily manage your finances.
Set A Proper Budget
First thing’s first, set a budget. This is where 99% of people trip up. They know how much they get paid every month and that their rent costs x, but that’s as far as their financial planning goes. Really, they need a proper budget.
To write a proper budget and begin to take control of your finances, you’ll need to follow a few simple steps. The professionals behind CalendarBudget point out that you should first, write down your income for the upcoming month. Whether it’s regular salary, overtime, sales, or any other form of income, it all needs to go down. Put this all in a column and total it up. Then, do exactly the same with your expenses. Rent, bills, subscriptions, and any other monthly outgoing needs to be on here. Once you have done this, you will have an amount left over. This can be your spending money.
Finally, you need to note down any debts you have. These should have already been looked at in your regular outgoings. Are any of them very high interest or large sums? If so, consider pumping more of your money into paying down debts. After all, they are costing you money in interest, which is the opposite of what we are trying to achieve.
Use Apps and Tech to Help
Once you’ve got this all noted, you’ll want to start tracking your spending. There are so many great apps and desktop programs available to help you keep on top of your budget. Some are simple, allowing for quick budgeting and manual tracking of expenses. Some link to calendars and planners, helping you see your current expenses and what you can expect in the month ahead.
Nowadays, some apps are able to tie themselves in with all your accounts. They link to your current accounts, savings, credit cards, and more, giving you a total and complete picture of your overall finances, as well as spending and savings targets. With technology like this, it’s a wonder any of us are falling behind on our money management.
Separate Your Accounts
A top tip given to us by many experts in personal finance was to separate your spending money from your bills and expenses money. By this, they mean once you’ve done your budget and got your final amount for disposable income, you should send that money to a ‘spending only’ account. This way, unless you go out of your way to spend extra money, you can never overspend. Use a mobile banking app to track this spending account and it’ll help you keep on top of how much you’re spending as the month progresses.
Make Saving A Key Element
Finally, when managing your finances, you should be considering savings. Saving should be part of your budget. You need to think about short-term savings for emergencies, holidays, birthdays, and special events. You also need to consider long-term savings, to help you in your later life. Nowadays, there are some cool apps integrated within your mobile banking to automatically round up amounts into your savings or send regular amounts into different savings pots on your behalf. If this is not something that interests you, you should manually set aside the right amount of money into each savings account each month. Don’t let savings slip aside, as they are just as important as your other ‘bills’!
With these four tips, you should be well on the way to developing a proper plan for financial management. Set your budget, use tech to track it, separate your money into different pots, and make sure you save. Simple enough, right? Believe us, once you have it all up and running, you’ll feel great.