4 Ways To Be Better With Money
Being on top of your finances seems like the ultimate ‘adult’ thing to do, doesn’t it? Knowing what’s in your bank account and what you can afford can give you so much freedom, even if you aren’t earning the salary you’d like. Actually getting on top of your finances though can feel terrifying and daunting, we’ve all had that sinking feeling when we know we should be checking our bank balance but we’re trying to avoid it. Getting into healthy financial habits, no matter how difficult and uncomfortable they may feel at first, is the best way to give you that confidence when it comes to your own money and just generally get better at managing it.
Unfortunatley we’re not really taught about money in school, and neither were our parents. In fact, our society tells us that we should hardly ever talk about money but we should just instinctively know how to be “good” with it. Clearly I disagree. If you aren’t surrounded by people who are good with money then it can be even harder to pick up those healthy habits. Being in total control of your finances is one of the best feelings, it means you know what you have, what you can’t afford and what you need to do to become more secure. If you don’t know these things you can never feel more confident in your bank accounts. Being ‘good’ with money, in my opinion, isn’t so much a measure of how much you have but more about what you do with it. And if you aren’t earning as much then arguably it’s even more important to be in control of the situation. The sooner you get into those positive habits the better, but that said, it’s never too late to start. It’s a process and no one is perfect, but if you’re feeling a bit overwhelmed by it all then here’s how I got more in control of my finances.
Get to know your finances: First things first, you need to get to know what your finances look like not only on pay day but throughout the month. Get into the habit of checking your bank account every few days and suddenly it won’t seem such a scary task. With certain banks you can set up a weekly text reminder to tell you what’s in your account or send you a message when your balance drops below a certain amount. It’s can feel uncomfortable at first but if you don’t have any clue what your account looks like throughout the month then getting better with managing your money is always going to be that bit harder.
Budget: It sounds boring, I know, but budgeting is honestly the best way to manage your money. No matter what you get paid or how often your paid, having an idea of your upcoming outgoings will give you a better picture of your situation. At the start of the month I sit down and work out how much I have, what my fixed outgoings are (rent, bills, season ticket, food shop etc) then I add in all of the things that I need to cover but aren’t fixed (birthdays, additional travel expenses) and finally a work out how much I want to save. I put it all into a spreadsheet so all the maths is figured out for me and it’s easy to update as I go. It’s never totaly accurate as things change but having a rough idea of what I’m left with makes it much easier to judge whether I can afford a takeaway on Saturday night or whether I should cook (side note, it’s always cheaper to cook).
Save on Pay Day: Making pay day the day you add money to your savings is the best way to ensure you actually manage to save. You get it out of the way and can’t be tempted to dip into the money for a ‘treat’ if it isn’t in your account. Setting up a savings account is super easy and can be done through your current bank. I like to have a couple for different focuses: I have a help to buy, one for future things like holidays, moving etc and then an emergency pot that is strictly reserved for just that, emergencies. Adding to these ensure I’ve saved a good chunk of my salary and then if anything is left at the end of the month I can just add that in too. I can’t express how important it is to save money if you can, even if it’s just a few pounds a month. Literally whatever you can afford is better than nothing and it helps to give you a safety net, especially in uncertain times.
Re-assess: Getting on top of your finances takes time, and life changes. What worked for you in January may no longer be realistic or you may be able to save even more. Every month or so I re-assess to see if I’m saving enough to reach my goals, whether I’m saving too much (yep, done that, not fun) or whether there are any bills or expenses I could reduce to help me feel more financially comfortable. This also helps you get to know what your options are if you suddenly need to save a bit more, you have an unexpected expense or even just a more social month.
Finally sitting down to address your financial situation can be so daunting and even anxiety-inducing, especially if you know that you probably aren’t in the place you want to be. But trust me, once you’ve done it, you’ve worked out how you can pay off any outstanding debts, how you can save for the future or even just not be left hunting in old handbags for the odd £5 just before pay day (we’ve all been there, let’s be honest). It’s not a competition or a race, but the sooner you start the sooner you’ll feel more in control and confident with money.
If you feel like you could do with additional support relating to financial concerns or debt there are a list of charities and organisations here.