If you find managing your personal finances stressful, you’re not alone. Whether you’re stuck in a cycle of debt, want to improve your standard of living, or just want to save more, here are seven simple strategies that can help you take control of your finances:
1. Make a financial plan
Having a short and long-term financial plan, including a timeline, can help you prioritize your financial goals. Think about what you want in the future and when you want them, like retirement, buying a house, or reaching a savings goal.
Once you have a plan, monitor your goals over time to see how much you’ve accomplished. Then, you can see if you’re on track to achieve your objectives.
2. Create a monthly budget
After setting some financial goals, it’s important to make a budget to manage your money. A budget helps you see what income you have and how much you are spending.
Start by writing down your income and expenses. If there are changes and improvements to be made, start making them – and stick to the changes!
3. Reduce your expenses
One way to improve your financial situation is to reduce your regular bills and other expenses. Some outgoings are fixed, like rent. But others, like insurance or phone bills, can be reduced.
Also, there may be some other costs that you can cut out altogether. For example, if you have services you don’t use, cancel them. Or if you eat out all the time, consider eating at home.
4. Pay off your debts
Being stuck in debt can damage your finances. However, you can start paying them off and this will quickly have a positive effect. Start by listing your debts, then work out what you can afford to pay off each month, starting with the highest interest or priority debts.
5. Start a regular savings plan
You can start to build wealth for the future by setting up a savings plan. This could be a small, affordable amount each month – but it quickly adds up and will boost your finances.
Your savings should include an emergency fund. This can cover any unexpected costs in the future, like a car breaking down or needing to take time off work.
6. Ask for a pay rise
You can also boost your financial situation by asking for a pay rise. You can do this by speaking with your manager and making your case by explaining why you deserve more money.
Additionally, working on your professional skills and gaining a new qualification can help you earn more, as you will be more competitive in the job market.
7. Find additional income sources
Lastly, if your budget is still short, you can solve this by finding additional sources of income. This could be getting a second job, starting a business, freelancing, or investing.
If you’re thinking about investing, we recommend meeting with a financial advisor so you can reduce your risks and make smart choices.