Talking about money is one of those topics most social circles avoid but it’s often helpful to hear what your friends and family are going through. Whether it’s a phone app that’s made it easier to budget, a new savings account your best friend can’t help but shout to you about, or a bit of a moan about student loans. All of these conversations are great to help one another understand personal finances better, and it can give the opportunity to find out about tricks you may be missing out on.
Budgeting
Whether you’re using a budget planner, and excel spreadsheet or a money management app, it’s always best to budget. Because how are you meant to save money if you don’t know where you’re spending it?
May sure you know how much money is coming in every month, and also make a note of your necessary expenses, like rent, bills and food. After seeing how much you have left, try and save a little bit (even if it’s as small as £10 for now!) and you can use the rest for anything else you need to purchase. Saving doesn’t mean completely limiting yourself – but making sure that your savings is a ‘necessary expense’ before you spend anything really helps you to stick to it.
Interest rates and ISAs
Different banks have different interest rates on savings accounts and ISAs and new offers are out all the time.
In the long-term, ISA’s are a great way to gain compound interest year on year. Because it’s tax-free your interest also won’t be taxed! So if you’re inputting a regular amount, it’s a good boost.
Interest rates are also important to look out for! Banks will often give good interest rates for the first year, and then take your account down to a more ‘reasonable’ rate. But if you shop around a bit, you can change accounts to get the best interest rates.
Credit Cards
Yes I know most people get worried about spending money they ‘don’t have’ but having a credit card (and using it!) helps your credit score. Even if you’re only spending £20 a month and paying it all straight back it helps. This means it will be easier for you in the future to obtain credit, for help with any kind of loan.
For example, with my credit card I pay for all my food for the month. But I put about £30 a week into a current account that has a direct debit set up to pay off my credit card in full every month. This means that I am in fact using money that I know I have, but it helps me in the long run!
Better money management…
Most people just aren’t that good with money! Everyone is guilty of impulse buying and overspending. So to help yourself, you need to manage your money better. You can do this by budgeting, but also making financial plans. If you know you’re earning X amount a month, you can estimate how much you’ll earn over the next few months.
This allows you to plan your money for the long-term and not just for short savings goals. Instead of thinking you can save £100 a month to afford that great new handbag this autumn, you can plan for this time next year and see how much you could save for a fantastic holiday! Or if you know you want a house in the next five years, check to see how much you could possibly save in that time! Managing what you spend your money on, and deciding what is most important to you can help you route your paychecks in the right direction to give you a happier (and less stressed) life!