Getting a hold on your personal finances is incredibly important, regardless of what stage you’re at in life. But what exactly can you do to ensure you get your financial business in order? Here are five tips to help you.
1.Create a budget
One of the most basic tips when trying to get a hold on your personal finances is to set out a budget. Not only will budgeting enable you to see exactly where your cash is going each month, it’ll help you to save long-term. Having a bit of extra money aside for a rainy day is always a sensible idea and will be a welcome relief in times of emergencies. Write down how much you earn for each month and subtract all your bills, utility payments, and other essentials from it. Setting out a budget is surprisingly easy and once you get the hang of it, you’ll find that your financial business will start to take care of itself. A particularly effective budgeting method to use is the 50/30/20 rule, whereby you spend half of your money on essentials like bills and food, 30% on leisure activities or luxury items, and the remaining 20% is put in savings.
2.Organise
Organisation is important when getting a hold of anything in life, but never is this more true than when it comes to personal finances. This makes sense when you think about it – how are you supposed to keep on top of bills and remember what you have saved when all your bank documents are strewn all over the place? To start off, gather all your financial and banking paperwork, such as your phone bills and contract, utility bills, house deeds, insurance documents, pension statements, credit card statements, and anything else that’s related to your bank accounts or financial business. Separate all these documents into relevant piles and label them accordingly – for example, ‘X bills 2022’.
3.Manage your cards
Whilst credit cards make paying for things much simpler, it’s easy to get carried away if you’re not careful. Take a note of what you pay for with credit and try to use cash more often. Trying to juggle several bills at once can be overwhelming and lead you to missing out on the odd repayment. Before you know it, you’re behind and you’re in debt. To avoid any mishaps that could negatively affect your credit rating, consider consolidating your monthly card payments into one single bill. There are companies that can arrange this service for you and it’s worth looking into. Also be mindful of using your credit cards for cash advances as these tend to have high interest rates.
4.Make a will
Making a will might be the last thing on your mind, but it’s really important. Regardless of what stage you are at in your life, getting your financial affairs in order is definitely something you should not neglect. You want to provide financial security for your nearest and dearest and ensure that there are no disputes over your assets in the event of your passing. It might also help your family deal with funeral fees and could reduce potential inheritance costs. Creating a last will and testament is especially important if you have young children or pets as it can appoint guardians should the worst happen. It’s always sensible to be prepared.
5.Reduce debt
Reducing the amount of debt you owe will go a long way in enabling you to get a hold of your finances. Keeping up to date with your monthly bill payments is crucial if you want to try and avoid getting into debt. Ideally, you want to avoid getting into debt in the first place, but if you’re already struggling with debt, then there is help available. You might look at a dedicated repayment plan or use an online debt tool to help you. You might also arrange to have them consolidated into one easy payment system via a financial service or apply for a loan that pays off all your debts at once. Before you take out any loan though, you should always do your research. Shop around and compare different lenders on sites like Swedish Prekredit.com before you sign up for any loans – you could save yourself a lot of time and money.
Conclusion
Setting out a budget and sticking to it, organising your financial documents, managing your credit cards, making a will, and aiming to reduce your debts are all great tips if you want to get a hold on your finances.
