It’s no secret that times have been financially tough in recent years. A global pandemic and an ongoing cost of living crisis have made it difficult for many Brits to stay on top of their money. According to Finder, 46% of the UK population has £1,000 or less in savings and almost nine million people don’t have any at all.
These difficulties can bring many money-related stresses to your life, and you may now be looking for ways to manage your finances. These useful tips can help with this.
Creating a realistic budget
Regularly reviewing your income and expenses allows you to make necessary adjustments that align with current conditions.
Identify non-essential payments that can be cut out to free up your cash. This might include dining out, subscription services or costly hobbies. Prioritise essential costs like housing and food, while topping up your savings at the same time.
A flexible budget is key, allowing you to navigate fluctuations in income or outgoings. Strategies like the 50/30/20 rule can help, as you allocate 50% of your wage to needs, 30% to wants and 20% to savings.
Building an emergency fund
This safety net lets you cover unexpected bills without relying on credit or loans. Experts suggest you should have three to six months’ worth of living expenses for peace of mind. If this seems overwhelming, start small and build up over time to reach your goal.
Consider placing your funds in a high-yield savings account where it can grow while remaining accessible.
Managing existing debt
Navigating debt can be significantly harder when the economy is unstable. A good tactic is to focus on paying off high-interest ones first, such as credit card balances or payday loans, as these can quickly escalate if left unchecked.
If you’re struggling to keep track of multiple debts, combining them into one lower-interest loan may be an option worth exploring. This can be done with a debt consolidation loan, which can simplify your repayments and sometimes get you more favourable terms.
Planning for the future
Goals like saving for retirement, building a deposit for a home or preparing for your children’s education keep you focused on the bigger picture.
Start by creating a financial plan that outlines your goals and the steps needed to achieve them. Consider consulting with an advisor who can tailor your plan to your unique situation and assist with any current issues.
