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It is no secret we had a year of struggling financially and it was the worst feeling in the world. I would visit the supermarket and take items out of the basket because they were unaffordable.
With the state of affairs in the UK at the moment and the impact of the pandemic felt all over the world, it’s even more important to plan for all eventualities and if you can, save some money.
In this post, I will explore my top tips on how to manage your finances.
I will admit, in the past, I have probably spent money on things I didn’t need and it’s easy to live in denial when you’re doing this. But it’s so important to be realistic and honest about the state of your finances. It is the only way you will budget correctly. And be successful in your financial goals.
Because I have personally experienced both ends of the spectrum, earning a lot of money and struggling financially, I wanted to share the following tips with you on how to create a budget. And how to manage your finances well.
Be realistic
I will admit, in the past, I have probably spent money on things I didn’t need and it’s easy to live in denial when you’re doing this. But it’s so important to be realistic and honest about your finances. It is the only way you can budget correctly. And be successful in your financial goals.
Creating a budget can help capture the bigger picture when it comes to your income and outgoings and highlight unnecessary spending, making it easier to manage your finances.
Include the smaller costs in your budget
It’s easy to think a lender or finance company would only ask you to include the hefty, priority bills. However, this isn’t the case. Newspaper subscriptions, birthday presents, social activities, are all costs you pay for and therefore everything must be included. This will allow you to get a real picture of your income and outgoings.
Ditch any cost you can realistically live without
Ensure priority bills are paid. However, we all know we have some costs that aren’t required. If you haven’t visited the gym in a few months, cancel the membership! Could you consolidate your television subscriptions into one monthly cost? Maybe installing a smart meter could help with electricity bills?
After looking into it, you may not save money and then the answer to switching is no. However, what if you could save £200.00 a year by making a switch? It is worth reassessing regularly.
Set financial goals
Even if you don’t have enough money to go around, you can still set financial goals. It’s amazing how many items we lived without for a year and it turns out, I didn’t need them.
Maybe one of your goals is to meal plan and reduce food waste. You could stop buying a luxury item on the weekly shopping bill. Maybe you add £1.00 per week to a savings account. Small changes add up to big things eventually.
Savings
This leads me nicely onto my next point – savings. Even when we were struggling financially, my hubby would automatically move £5.00 to savings. It turned out at certain points in the month this money was really valuable and I was glad he moved it and forgot about it.
Separate accounts for bills and spending
In the days when both my hubby and I had overtime pay, no children, and managed money well, we had separate accounts for everything. I find having automatic payments takes the stress away. It was easy to do this when we had ample funds to go around. However, a little more difficult when there is a lack of money and direct debits could be returned unpaid.
I am still paying bills manually at the moment and I am in the process of setting up a budget for myself.
Seek help if you need it
The problem we faced as a family was a lack of overtime payments during the pandemic and we therefore slowly struggled financially over several months. I will be honest and say financial difficulty was unexpected. We thought we could manage and then one day we couldn’t.
I had no option but to contact my credit card companies to ask for a payment holiday. Doing this wasn’t easy for me, but it had to happen, and making these changes brought some relief and peace of mind.
If you’re struggling financially, there are companies out there to assist you. Don’t be afraid to do some research and seek the help you need. Learn more here.
Final thoughts
I hope you found my tips to manage your finances, helpful.
Let me know in the comments below whether you’ve created a budget. Have you managed to save money on bills, or create a regular saving pattern?
Great idea having a separate account for bills and leisure spending. This can help you ensure that you don’t spend your bill money.
It’s a mindset thing. Not having access to certain pots of money tricks your brain into thinking it isn’t there to spend.
Thank you for sharing these tips on managing your finances; they were helpful!
I love your tip of ‘small changes add up to big things eventually’, as we can become bogged down with the idea that you have to save a large sum each week when starting small is just as beneficial.
My partner and I have a budget that we review each month, which is helpful for us as we can see if any changes or improvements need to be made. Thank you for sharing. 😊