How you manage, spend, and invest your money can have a profound impact on your life, yet very few schools teach these important skills. Learning financial savvy can take a while, but the basics are fairly simple and never change. Below are a few useful ideas on how to manage money.
Some of you start to struggle financially in the week leading up to payday. It can often seem that there is never enough money to go around. However, could it be that you are not managing your money in the right way? Taking the time to manage your money better can really pay off. It can help you stay on top of your bills and save £1,000s each year. You can use these extra savings to pay off any debts you might have, put them towards your pension, or spend them on your next car or holiday. This blog post will look at some ways on how to better manage your finances.
You can’t manage what you don’t measure – Peter Drucker
The first step to take when managing your money is to work out your budget. It is all too easy to spend without really tracking where the money is going. It is a good idea to look at your total expenditure over the course of one month, including bills, food and casual spending, to give you an overview of what you have to work with each month and where you are overspending. This way, you will be more mindful of what you can afford.
It sounds obvious, but a lot of you don’t do this. Taking on debt, such as credit cards, is often essential to building your credit history. However, you do need to use them sensibly. The ideal scenario is to pay them off completely while they remain interest-free. You should not use credit cards to make ends meet, as this is when the debt can spiral. It is best to keep them for larger one-off purchases.
It is never too early to start saving, as doing so will mean you have something to fall back on during times when you are less financially secure. Savings also allow you to plan for the future, whether this is to start a family, move, or buy a home. Having savings in place also allows you to feel in control, which can lead to better overall financial planning. Without having savings in place, it can be all too tempting to keep on spending blindly. Take a look at The Telegraphs article on Managing your pension: will your money run out before you die?
Keeping spending in check sounds obvious, but it is useful advice to keep in mind. Everything is so convenient these days that you often have less patience when it comes to taking the time to research your purchases. Lack of research can mean you pay over the odds for something that you could get somewhere for much cheaper. There are many price comparison sites available now online that can help you with finding the best deals. You also need to assess whether you need to buy the items that tempt you.
If you are interested in personal finance, you may wish to study one of Oxbridge Home Learning’s Mortgage and Finance courses.