Getting your finances in shape is usually one of those tasks that are left at the bottom of your to-do list as it involves sitting down and being realistic with yourself and your spending habits. What you need are proper money management tips.
I know the drill all too well. It is boring and makes you feel bad because you realize you spend over £100 a month on Fancy coffee’s you dont need or that 6 months ago you brought a £1000 television you wanted but didn’t need as you have 2 other perfectly good televisions. (Yep, hands up that was me)
Well with Coronavirus, the all-consuming global pandemic sweeping countries everywhere and the current financial climate looking shaky now is the perfect time to look over your finances and whip them into shape.
I have 7 Super Simple money management tips to get your finances in shape and you are going to wish you had done this way sooner.
Money management skills can be hard as they are not really taught in schools so don’t feel ashamed if you are bad with your money. I know I used to be.
So let’s dive straight in and try and learn how to manage money effectively.
Money Management Tips:
1: Go Paperless
See I told you these were going to be Super simple money management tips didnt I? Listen one of the things that used to make me cringe when I knew I had to sit down and go through my finances was the fact that I had to dig out tons of paperwork and sift through it all.
Let’s face it not many of us are able to keep all of our paperwork in the correct place and have it all labeled and in categories. I mean it would help but we just dont have the time or the patience to do that right?
Firstly you are helping to clean up the environment by going paperless so that is one good deed for the year. Secondly, by clearing out all that paperwork you are also cleansing your mind a little bit as well.
Of course, it goes without saying that you shouldn’t grab all of your paperwork and throw it out without looking through it first. There are certain things you shouldn’t throw out like your end of year tax records.
Over at www.hermoney.com Nancy has a handy list of financial paperwork you should keep. A very useful list if this has inspired you to go paperless and start clearing out.
The more important pieces of financial documentation can always be scanned and kept on various labeled files on your computer and also on a USB stick. This way you have 2 copies of any important documentation.
Also keeping these financial files on the computer and having them labeled and organized means in the event you need any of them, say for a mortgage application they are all there where you need them and super quick to find.
2: Online Banking
Here is more of my super simple money management tips. This one is a no-brainer really as I would suspect most of you reading this are using online banking but there are the odd few who are not doing this yet.
Honestly, there are still people out there that are asking the question of what is online banking? For the older generation, it can be confusing and scary.
Online banking is essentially accessing your bank account and carrying out all the normal financial transactions via the internet which can be accessed through either your computer or mobile phone.
Online banking is one of the more basic money management tips that you can learn when trying to manage money wisely.
Online banking is pretty safe as well. You have to make sure not to give anyone your passwords and try not to use public wifi when out and about and just use your home network which should be secure.
Online banking is also really easy to set up although if you are not confident at doing this or working on a computer then most banks offer a service where you can pop in and they will set it up for you and walk you through the ins and outs of online banking.
This is one of the simplest money management tips I can offer though and one which you should certainly be doing.
3: Money Management Apps
So you already are getting your finances in order through some great money management tips and you are learning how to go digital with Online Banking the next step is to make use of some great Money management apps or budget apps.
Having the ability to save money is a gift and some of us do not have it. I love saving but I didn’t always and I certainly didn’t have the amazing array of mobile budget apps that are now available.
I have already put together a list of the best mobile budget apps available but here are my two favorites.
My most favorite is the one I am currently using which is called Plum. Plum is such a simple app and you can set various rules in order for the app to work out how to save for you.
I tend to set up the round-up command as this just rounds up any money spent on my card and then sends it to my Plum savings account.
It is so easy that you dont even know you have been saving until the weekly update from plum that tells you it has saved another £12 for you. It truly is a great savings app for busy people.
The other amazing budget app that I have used recently is Spendee. Spendee is a bit more in-depth than the Plum app that I currently use. Spendee has utility bill trackers and can operate in a multitude of currencies including Digital currencies which are becoming more and more popular with the onset of Cryptocurrency.
Spendee is free but does have some pricing structures should you wish to get the full Spendee experience.
Budget apps are great for keeping track of your money and savings while on the go and are the next step up from online banking.
4: Create A Budget
Creating a budget is something every household should do. Firstly it lets you see your incomings and outgoings but it also enables you to work out where you need to make changes in order to save money or pay off debt.
As soon as you have worked out your incomings and outgoings it makes it so much easier to tell if you need to make those all-important changes to your finances.
You may see that your outgoings are bigger than your incomings and then you can get to work to cut those outgoings down in order to better balance your money.
Nothing enhances your money management skills like creating your own budget. It helps teach you how to manage money wisely. Creating a budget that also has a saving section is crucial but also if you are saving for something in particular such as a holiday or downpayment on a house this can help you stay focussed.
My wife and I went budget mad when we needed to save money for a deposit on our first house and we managed to save £21000 in 12 months. I make it sound easy. It wasn’t it was hard work but without a firm budget, we would never have managed it.
5: Have Savings
It sounds like a simple one doesn’t it but having a small amount of savings is one of the simplest money management tips I can suggest. Having savings is like a lifeline. Any number of things could happen.
I only have a small amount of savings myself but with the current global pandemic and unstable economy who knows about my future job security.
I currently have enough savings to cover my wages for a few weeks should the worst happen.
Your savings could come in handy for other reasons as well. Last week, for example, our Refridgerator started making noises and seeing as it is quite old we simply dipped into savings and brought a new one.
Trust me when I say even a few hundred pounds can make the world of difference should the unexpected happen.
6: Encourage Finance Talks With Your Partner
So many couples go quite and clam up when finances are mentioned. I know of a few couples that simply won’t have a joint bank account as they dont trust one another (Makes me question the relationship).
You need to both sit down and be completely honest about finances and all the little expenditures you foresee down the line. If you are not truthful about something now then it will only cause problems at a later date.
Being completely open and honest about finances will set you and your partner up for good money management down the line.
Boring aren’t they rules? Unfortunately, when it comes to good money management they are essential.
You both need to sit down as discussed in the above tip and work out all incomings and outgoings and then decide on rules with regards to spending.
You can’t allow one another to just go spending on needless things without consultation with the other person. Set aside a budget for both of you when it comes to disposable income and then make sure that some of this disposable income also goes into savings.
Maybe you could both decide to make packed lunches for work instead of buying lunch every day. You may also decide to curb spending in other areas but by simply speaking about it with your other half and creating these rules this will put your finances in better shape.
I hope these simple money management tips have helped and you have applied some of them to help steer your finances in the right direction. Let me know if you have utilized smart money management yourself and how it worked for you.