Do you have a number of innovative reasons why you’re unable to save money from one month to the next? Are you continuously only making the minimum payment due on your credit cards or store cards? If this sounds like you, we have some bad news for you – you’re not as good with money as you think you are! Don’t worry though, according to the stats, you’re not alone.

8.3 million people in the UK are in the same boat!

Earlier this year (September, to be exact), the BBC released an article that unveiled the truth as supplied in a report from the National Audit Office. It stated that as many as 8.3 million people in the UK are in debt that they are unable to, or struggling to pay off. The major credit culprits are mortgage companies and credit card companies.

That aside, with the holidays doing what they do (make us spend money, in case you didn’t guess), you might be a little concerned that 2019 is going to start off with crippled cashflow. And for many it will! All it takes is a little festive cheer to truly shake up one’s finances, isn’t it?

While millions of people are blaming the festive season for their financial struggles, one has to wonder if it is really just the holidays that are to blame. It’s actually not! In most instances, it’s poor personal finance management, or lack of budgeting, during the year that leads to the end-of-the-year financial devastation. You can turn your financial situation around by taking a look at your personal finance management and making positive changes. Of course, if you are in serious financial trouble and need expert advice and assistance with overcoming your debt, there’s always the likes of StepChange Debt Charity to seek help from.

Maybe You’re Handling Your Personal Finances All Wrong – Here’s 5 Tell-Tale Signs

People tend to make all kinds of excuses about their poor financial management skills. “It’s just a rough month”, “prices are soaring while salaries are staying the same”, “next month will be better” are all common phrases that we console ourselves with. Because of this kind of mindset, even if you are struggling to make ends meet, you might not be convinced that you are handling your finances/budget poorly. We’d like to remove some of the mystery for you.

Below are 5 tell-tale signs that you’re doing things wrong and your finance management needs a rethink.

1. You often find that you have to pay late fees and overdraft fees

Forgetting to pay your rent or a credit card can lead to mini slaps on the wrist in the form of late fees and penalties. This might not seem like a “big deal” at the time, but if it keeps happening, think about how much money you are wasting over the long term! If you are slacking on your payments, you aren’t paying enough attention to your money management responsibilities.

2. Your bank statement is a mystery to you

If you make more shopping lists than you do expense lists, you’re going to get caught out. It’s important to scrutinise your bank statement regularly to ensure that you know precisely what’s coming off it and that your debits and payments match your list of expenses. If you don’t know where your money is going, you aren’t handling your personal finances very well. A quick look over your bank statements can also help to investigate double charges, cancel unwanted costly services, and generally know your financial status.

3. You don’t have emergency savings

Emergencies can crop up and life can change in an instant. It’s best to be prepared. If you aren’t managing your money in such a way that you’re able to save for the unexpected, you’re not doing your personal finance management right. While everyone is different, it’s a good idea to have up to 3 months in expenses saved.

4. You have no financial plans for retirement

Retirement is going to be fairly bleak if you don’t have any money for it! If you want to enjoy critical years of growth on your retirement savings, you should start saving young. However, it’s never too late to start, so don’t be despondent if you’re a late bloomer in this department. MoneySavingExpert.com actually posts some interesting information on how to plan and save for a personal pension. They suggest that the rule of thumb, when trying to calculate how much you should be saving for retirement each month is as follows: “Take the age you start your pension and halve it. Put this % of your pre-tax salary aside each year until you retire”. This gives you an idea of what you will need when you retire and also illustrates how important it is to start saving early.

5. You’re a minimalist…when it comes to the amount you pay on your credit card

While only paying the minimum amount due on your credit card may seem like an okay thing to do, it’s not. It can end up costing you an arm and a leg in the long run, thanks to interest rates. Paying the minimum amount due usually means that you are only paying a portion of the interest back. This can result in perpetual credit card debt. That’s never a good idea. The only way to truly benefit from credit card spending is if you can pay the credit back quickly.

A New Year’s resolution worth investing in

If you’re looking for a New Year’s resolution this year, we have a suggestion for you. Aim to turn your poor personal financial management around. Focus on investing in a financial future (and present) that is sound. When applying for credit, choose providers that offer affordable interest rates and alternatives to long term debt.

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