When it comes to our physical well-being, many people at least try to visit the gym on a regular basis, commit to healthy eating during the week and have regular medical check-ups. Unfortunately, the same cannot be said about our financial well-being, which is often neglected.
Just as you have to take care of your physical and mental health, you also need to take care of your financial health. Our financial health is something that we simply cannot neglect as the consequences could be detrimental. The good news is that it’s never too late to start looking after your financial health!
Tips to help you manage your money
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Track your spending
If you don’t know what and where your money is going each month, then your personal spending habits probably have some room for improvement. Understanding your spending habits can be a simple process, there’s no need to manually record each purchase, there are apps for this that can make your life a lot easier. Furthermore, there are also a number of banks that offer this service for free if you use one of their transactional accounts or debit cards. This way, you can see exactly how much you are spending on each category (for example: groceries, transport, clothing) on a monthly basis.
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Create a realistic monthly budget
Use your monthly spending habits, as well as your monthly income, you can now set a budget! We know that creating a budgetmay seem quite daunting at first, but it’s necessary to get your financial health in order.
Having a budget in place is vital as it allows you to see exactly where your money is going and where you can save. It’s often the small purchases that can add up quickly, so it’s important to leave some room in your budget for the little ‘unexpected’ purchases.
You can download our FREE personal budget tool in Excel here.
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Build an emergency fund
An emergency fund is an essential safeguard against any unexpected expenses. If the pandemic has taught us anything, it’s to always be prepared for the unexpected.
Having an emergency fund can save you a lot of money, and not only that, it can help you avoid going into debt! Unexpected expenses can be BIG, and when they catch you off guard, you won’t be smiling. Vet bills, vehicle repairs and job losses are among the things many of us simply don’t budget for and if you don’t have an emergency fund, you’ll land up having to resort to credit cards or high-interest loans. Emergency funds are especially important if you have debt, as they can help you avoid borrowing even more money.
At a minimum, it is recommended to have at least three months (this will take time to accumulate) worth of living expenses saved in your emergency fund. However, the more you can save, the better.
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Control your debt
Debt makes it incredibly difficult to manage your money efficiently, so it’s important to get it under control and paid off as soon as possible. You don’t want to get caught in the debt trap as this will lead you to take more loans to help you with your repayments.
A great way to get on top of your debt is to prioritise them in terms of which is more important, you can read here to find out how to do this.
At Debt Movement, we know that bad debt happens to good people. If you’re struggling with bad debt, we are here to help you! Request a free call back today and feel the weight lifted from your shoulders.
