Hands up, who struggles to keep control of their cash? We’re all guilty of spending too much, and finding ourselves short at the end of the month. It’s very easy to get caught up in a spending free-fall with credit cards, overdrafts, and loans. Wouldn’t it be great if you could end the month with some money left over for once? There are no big secrets or golden tickets when it comes to managing your personal finances. It all comes down to simple common sense. Here are some of the basics you should know.
- Spend less than you earn
It might sound like silly advice, but you’d be surprised how many people don’t stick to this rule. We’re guilty of it, and I’m sure there are months where you’ve spent more than you earn! It’s easily done, and it won’t hurt you in moderation. But, in general, never spend more in a month than you have earned. It’s simple maths. We know how tempting it is to pay for items on your credit card, but try to avoid this urge. Spend less than you earn, and save the rest instead.
- Look at your statements weekly
Again, this is another simple and obvious idea, but it really helps keep control of your cash. When we’re in debt, and running low on money, we tend to ignore it as much as possible. Instead, face up to your account, and dive in weekly. It will give you a better sense of what’s going on. You can make changes to your spending habits, and tweak your saving strategy. By looking at things in detail every week, you grow a stronger control over your cash.
- Plan for big events
It’s the big annual events that tend to catch us by surprise. Birthdays and Christmas are the biggest culprits. We end up spending a fortune, and leave ourselves without much money to cover it. We suggest setting up a small fund to pay for birthday and Christmas celebrations. Cash saving at Christmas isn’t easy, so try to put a little aside each month. If you’ve just emerged from a tough financial Christmas this year, try it next year! You can do the same for birthdays and weddings.
- Save first, spend second
One of the biggest mistakes that people make is spending their monthly pay packet first, and saving what’s left. Invariably, there’s hardly any left at the end of the month! Instead, save as soon as that money comes in. Put it aside before it even hits your bank account, so you can’t touch it. You’ll quickly build up a decent savings figure. Use it to start a business or take the family on holiday!
- Make debt payments a priority
It’s easier said than done, but try to avoid the clutches of debt! When those credit card bills mount up, it becomes a difficult cycle to break. You’ll never be financially stable while paying off mountains of debt. If you do have unpaid loans, make them a priority, and climb out of debt this year.
People who are smart and sensible with money live by these rules. If you’re looking to make a change in 2016, try them for yourself.