Tips to help you manage your finances

• Oliver Jones
• 9th November, 2015
• Better Budgeting & Saving

Money management is often seen as something very boring but it’s actually the key to getting all the exciting things that you want from life. From learning how to make your debts work for you, to making sure that you don’t overspend and have nothing left for what you love, being a good money manager will take you a long way. For most of us, managing our finances doesn’t come easy – there are many temptations and, especially in recent years, times have been tough. However, no matter what your income or where you are in life it’s easy to start getting on top of your financials with these easy to follow tips.

Set a Budget

Not just once a year but every month – maybe every week – on an ongoing basis. Budgeting and re-budgeting is basically a very easy way to make sure that you know exactly what’s going on with your bank account and to readjust your planned spending as money ebbs and flows. To work out a realistic budget, start with all your incomings (salary, pension, pocket money) and then make a list of all your spending within the timeframe that the budget covers. You’ll be able to see where adjustments need to be made to make the figures work. Keeping your spending in line with your income will help you avoid the need to take out short term loans.

Open your bills

Particularly when money is tight we all have a tendency to push the difficult or unwelcome payments to the back of our minds. Don’t leave those utility bills stuffed down the back of the fridge – open them up and deal with the issue. The problem with ignoring any bills you can’t pay is that, inevitably, they become overwhelming when you miss a payment and charges are added as a result. If you’re struggling to make payments then you can still manage a situation like this – speak to the company in question and ask for reduced payments, look into other financing options or make budget adjustments if you can.

Keep a spending diary

Sometimes budgeting is not enough as you may simply not be aware of where your money is going. To help you figure this out, keep a spending diary for a month and make a note of absolutely everything, even the smallest of purchases. It may seem tiresome but it will accurately show you what you’re spending your money on and that kind of changes it might be useful to make.

Start setting goals

It’s quite difficult to just save money for no reason, so many people find it motivational to set themselves savings goals. This might be saving enough to pay off your debts, to have a fantastic holiday, or to renew the contents of your wardrobe. Choose savings goals that will inspire you and work out how much you will need to reach them. The most important thing about savings goals is that they are attainable, as it’s incredibly demotivating to set goals that can never be reached. How much can you realistically set aside as savings each month and still live comfortably and meet your other financial responsibilities?

Have a buffer

Some people call it an emergency fund, some people a slush fund and others a buffer. Whatever the word you use for it, putting some money aside for a rainy day is a really good idea. This is the pot of cash that you can turn to in an emergency, that will protect your careful financial planning from coming tumbling down as a result of an unexpected expense or event. Life is unpredictable and a financial buffer can help you deal better with the less pleasant surprises.

Keep an eye on your credit score

Credit scores are strange financial beasts as they can change in response to some pretty unexpected factors. For example, you may think that it’s a good thing not to have any credit cards or loans but this actually has a detrimental effect on your credit score as it means you haven’t demonstrated the ability to be able to manage and repay debt. That could, in turn, affect your application for something like a mortgage. You can check your credit score for free at any number of places online (such as Experian) and get a clearer picture of what you look like to a potential lender. It may not seem as important as the money you have in the bank but your credit score can have a big impact on some of the more significant financial decisions and so it’s worth including it in your financial management plan.

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