If your money and finances are in disarray, you’ll probably have some unwanted stress in your life. The good news is that you can take a few straightforward steps to get yourself better financially organised. Also, you can start them right away and soon see some positive results.
Read on to discover steps to improving your money management.
Create Compartmentalised Bank Accounts
You probably wouldn’t consider keeping all your clothes in a single drawer. However, most people keep all their money in just one bank account.
The problem with doing this is it can lead you to spending on things you hadn’t planned. For instance, stashing your holiday savings away with your everyday spending could result in overspending on small luxuries, leaving you short for your travels.
It is much better to separate funds for your different spending categories. For example, short-term savings can go into an ISA, where you can leave them until needed. Here, they will also benefit from the interest they will unlikely get in a current account.
Compartmentalising your money is straightforward with a mobile banking app. With a few screens taps, you can set up different accounts and move funds between them. Moreover, it enables you to better organise your finances and keep track of your spending.
Review Your Regular Spending
A mobile banking application is excellent for reviewing your direct debits, standing orders, and other regular spending. You might be shocked to learn how much you are forking out each month on services such as broadband, mobile phones, and TV packages.
When you know what you are spending, you can start looking for cheaper alternatives. Price comparison sites are ideal for finding the best deals.
Falling behind on payments for these types of services can be stressful. However, it is easy to do so if you don’t pay for them until the end of the month, as your funds can be spent by then. Therefore, arrange these payments for the start of the month. Doing so will mean they get paid first, ensuring less stress and better financial organisation.
Eliminate Your Debts
Debt can be a significant source of stress; eliminating it will make you feel much better. Therefore, you should make this one of your financial priorities. Money management and planning for the long term financial future is important. Speaking to a specialist and taking on expert advice is helpful. Check out Portafina.
You can start to clear your debts by making minor sacrifices and lifestyle adjustments. The money you save from these can soon bring your debts down.
Of course, such sacrifices take motivation and may involve some short-term pain. However, if you focus on the long-term benefit of being debt-free, it will make the process much easier.
Even so, dealing with debts can be overwhelming, and some people struggle to know how to start. To get started, list all your debts and rank them according to their interest rates. It is best to tackle the high-interest obligations first. Doing so means you’ll have more disposable income to pay off the lower-interest debts quicker.
Help the Future You
Becoming more financially organised is excellent before your life today, and also crucial to consider your situation in the future. It is understandable if you struggle to envisage your retirement, especially if it is several decades away. However, by starting to save for your retirement today, you will help the Future You.
The good news is that you will likely have already started saving for retirement. You will probably be enrolled in a workplace pension if you are employed. The criteria for this are being over 22 and earning at least £10,000 per annum. A workplace pension is an excellent start if you have no other form of retirement savings.
You will also likely receive the State Pension. This benefit is paid in the mid-60s; however, this age is likely to rise. Although it is an excellent supplement, the state pension is unlikely to provide sufficient retirement income. Therefore, you should put in place other retirement income provisions if you have not done so already.
Disorganised finances can bring unwanted stress into your life. Hopefully, this brief article will help you manage your money better, giving you a less stressful life and helping yourself in the future.
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