Effective money management comes easy to some, however, for others saving money can be more of a challenge. If you often find yourself running out of money towards the end of the month, on the brink of getting into debt and you find it troublesome to save, it might be time to take a look at your personal finance habits and identify areas for improvement.
Improving your financial management skills will not only help you to increase your bank balance and your savings, it can also help you be better prepared against debt for any unplanned costs or financial emergencies. That is why we’re offering our top 5 personal money management tips that you can implement today to improve your financial future.
1. Install a money management app
These days there are a wealth of tips and tools that help you manage your finances better and, fortunately, some of the best money management online apps that you can download on your phone for free.
Personal finance and budgeting can help you to track and limit your spending, stick to your budget and recognise different areas where you can save; making them an essential tool for anyone looking to improve their financial situation.
One great example of a practical app is Money Dashboard which keeps track of all spend and allow you to connect directly to your banks.
2. Set up a budget
Setting up a budget and sticking to it is a vital aspect of good personal finance practices. This allows you to see exactly where your income is coming from and going to, and it can also help you to determine whether you can account for any unexpected bills or big expenses.
For you to create an effective budget, you’ll need to make a list of all of your monthly expenses. This includes spending on essentials such as food, paying off debt (such as credit cards), utilities and rent. Once you have this written down, you can see which areas are eating your budget and identify areas where you can cut back.
For more details tips on planning a manageable budget that you’ll be able to stick to, check out Citizens Advice online.
3. Set small, realistic money goals
You don’t have to start out saving large sums of your wages in one go. Setting smaller goals to achieve is a much easier way to manage your money and get your finances back on track.
For example, you could aim to put away at least £10 in spare change per week into your savings accounts. This is a realistic goal that allows you to build up funds, without putting pressure on yourself to save huge amounts of money at a time. Over the year, your spare change will add up to £480 that you can add your savings pot.
4. Get your family and friends on board
It’s an incredibly big challenge to restrict your spending when there are others around you who aren’t doing the same. That’s why getting additional support from your family and friends can help you to stay on track and achieve your financial goals.
Make sure to inform your nearest and dearest of your plans so that they can help you avoid the temptation to spend. Even better yet, you may even be able to recruit someone to be your ‘money buddy’, so you can improve your finances as a team and benefit from added support and motivation by having regular meetings and phone calls.
5. Set up a standing order
If you’re finding it hard to actively put your funds away in a savings account, why not automate it? You can set up a standing order from your main bank account to your savings account, so that you put money aside regularly without even realising it.
You can select the amount, the date and the accounts you want to send your money to. You can even set up online and mobile banking, which means that you can do it all from the comfort of your own home. This means that you can even send your money to a friend or relative if you think you’ll be tempted to spend your savings before you’ve reached your goal.
Improving how you manage your money doesn’t need to be difficult. Simply start small and stick to your new healthy financial habits. Stick within your budget, follow our advice and stop putting everything on your credit card and you’ll have everything you need to work towards financial freedom!