Flabby finances can happen to the best of us. A lot of us are either carrying around excess financial weight we’d like to lose or are wishing for stronger assets. What’s the best way to whip your finances into shape? Here are five suggestions to get you started.
1. Pay Off Debt
Debt can weigh heavy on your financial well-being. While some debts help you fund your basic needs (e.g., a mortgage, car loan or student loans), any debt that isn’t helping you move forward is just dead weight. Lose the extra pounds by paying off as much debt as possible. Start small in the beginning — every time a bill is due, pay off a few pounds more than you’re required to, and gradually increase the extra amount until you’re virtually debt-free.
2. Make a Budget
It’s advice you’ve probably heard a thousand times before, but here it comes again: You need to make a budget and track your spending. Whether you use an online platform, a spreadsheet or good old-fashioned pencil and paper, keeping track of expenses is the only way to know exactly how you’re using your money. When you stick to a budget, you can be sure your finances are on the right track and you aren’t overspending. Remember, creating the budget is only the first step; you still need to follow the plan you’ve laid out.
3. Go On a Financial Diet
As you’re budgeting your income, make sure you’re setting cash aside every month to put into your savings account. If you’re not accustomed to saving money and are having trouble finding the funds for it, consider breaking an expensive habit. For example, drinking water instead of tea, or quitting smoking, could save you hundreds of pounds per annum, and that money can go straight into your savings. Take another look at your spending sheet and see what categories you could possibly spend less on.
4. Contribute to ISAs
To strengthen your financial muscles even more, start saving for the future. If you can, put half the money you’re allotting for savings into an ISA. The funds can grow tax-free until you’re ready to retire.
5. Find an Accountability Partner
You’re far more likely to stick to your new habits if you have a mate keeping you accountable — or better yet, taking the journey with you. Money matters can make for difficult conversations, but fight the temptation to go it alone. Find a pal who can encourage you to reach your financial goals, and do the same for them. You’ll both be more likely to succeed.
¹The Money Advice Service (n.d.). Do you have a money resolution? Make 2015 the year of your finances with our five tips. Retrieved 12 January 2015 from http://bit.ly/1C8Es7R
The information in this article is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else.