This is a step away from the usual subjects I cover on the blog, but as I’ve said before, I want to use the #BEDM Challenge as an opportunity to try new things and (as it says in the title) to challenge myself!
I think I’m good with money. I’ve seen enough people have to make do without it or squander it away to know that I never want to be that person. I want to be financially stable, independent and savvy, and I’ve got a few tips that help me stay that way.
1. Know what you’re spending. Make a list of your expenses, whatever they are, just write them all down. What do you currently spend your money on? Look back at your bank statements so you can make this part as accurate as possible. That way you can see where your unnecessary spending lies.
2. Set up a spreadsheet. I recently moved into my first home with my boyfriend, and there was absolutely no way that I wasn’t going to be prepared. I have a spreadsheet that outlines ALL of our expenses. Set up one for yourself. If it’s just you, that’s great and it’s pretty simple. If there’s more than one of you, calculate what percentage you each contribute to your household income. Once you know this, you’ll know what percentage of the bills you should be paying for, too. If anything, be over-cautious at this point. Over-budget. Expect bills to be higher, one-off costs to be higher and plan a buffer for any unexpected expenses, because there will be some!
3. Sign up for Internet Banking. Most banks or building societies have an Internet banking feature, alongside an app, that you can sign up for and you absolutely should. Being on top of your spending is all about access, and when you regularly check your statements you’ll know where you’re at. There’s nothing worse than getting to the last of your money and not knowing where it’s all gone. These apps are also super handy for quick balance checks and transfers.
4. Plan ahead. Want to go on a big holiday next year? Fancy a new car? Start thinking about these things as early as possible and plan for them. Save up the money you need, rather than relying on credit you might not be able to pay back. When you want to start saving, you need to take a good, long look at your finances. This is the time when you really learn what expenses you can live without. Is that monthly magazine subscription really worth being two months further away from your goal? Probably not, no. Cut down on your spending and funnel that money into a savings account. Need to save £1000 over a year? Aim to free up £100 a month by living more frugally. It’s amazing how much you can save when your Starbucks coffees and Subway salads are no longer in the equation!
5. Save. Make sure you set up a savings account that suits you. There’s loads of information online, in brochures at your local branch and available from customer advisers. Use it. The account you want will vary depending on how much money you’ll be saving, how often you plan to access it and what you want to do with it in the future. Once you’ve got your account set up, plan to put something in every month, even if it’s just a tenner. If you’re budgeting for something, use tip 4 to help you save more. If you’re not, save what you can. I always budget to put a set amount into each of my savings accounts at the start of the month. Then, at the end of the month right before payday, I split what’s left in my current account equally between my savings. Even if it’s just a little bit extra, you feel great seeing those numbers ticking up, and you can feel smug about being sensible!
I hope you’ve found these tips useful, and maybe you can translate some of them into your life. I’d love to know if you have any money managing tips of your own, so please drop me a comment and let me know!
Thanks for reading, until next time!