We are all looking to manage our finances a little better, whether that’s saving more money or looking after our bills better. Sometimes we simply feel the need to be more knowledgeable about our own money, instead of just watching it slip through our fingers.
Luckily, we’re living in an age where financial planning and management have never been easier. In this short article, we will give you a few expert-recommended tips for better personal financial management. Read on to find out more.
Set a Budget
First thing’s first, you need to understand your budget. It’s quite simple really, make a list of all your income and regular expenses, and see what’s leftover. This gives you your spending power for the month. If you like, some experts recommend going even more detailed at this point. For example, say you have $600 left for the month after rent and bills, you can then break down exactly how you plan on spending said money. You might want to set aside $200 a month for groceries, $100 for travel, $150 a month for evenings out, and put the other $150 in savings.
Use Budget Tracking Software
Once you know your budget, you need to keep track and make sure you’re sticking to it, especially if you’ve gone into minute detail as described above. To do this, you’ll need some easy-to-use budgeting software, and there are plenty of desktop applications now available to help you track spending in different ways. Some use a calendar to place regular expenses while allowing you to note where expensive events may pop up. Some use a category system to help you watch as you spend through each particular pot.
Get Mobile Apps, Too
Many of the above software types will also come with a mobile version. Some are mobile-only. Either way, having spending tracking in your pocket is a really easy way to manage your finances. Some apps these days link directly with your cards or bank accounts to give real-time updates and reduce manual input of figures and transactions. As we said, it’s getting easier and easier to track these expenditures!
There is also no harm in going old school. If you are someone who prefers to note everything down yourself or pick through things with a fine-toothed comb, stick to the classics. Do a budget spreadsheet and find space and time to track it weekly or monthly to make sure you’re still on target. Keep receipts, make notes, and keep yourself on track.
A Separate Card for Spending
A top tip we got from multiple experts whilst researching this subject was to have a separate spend account. Have an account you get paid into and set up all your regular payments (rent/mortgage, bills, phone, car) to come out of that account. Then, the excess you have left as your ‘spending’ budget, transfer to a different account. Often, people use a mobile-only bank account for their spending account. This means you can see, in your pocket, at all times, exactly how much spending money you have left and unless you cheat yourself by using your other cards, you can’t overspend.
Get Free Advice
Without even realizing it, you are already following this piece of advice. You’re here reading this because you want to take control of your personal finances. You’ve already taken the first step. There is a huge amount of free advice out there on this subject. Podcasts, YouTube channels, and articles all over the internet are dedicated to mastering personal finance. Podcasts especially are great, as you can listen to other people’s stories of personal finance success and failure, learning tips from what did and didn’t work for them.
Saving is often overlooked. Too many people do not have a pension plan in place and hold no long or short-term savings. Your first goal should be to hold an emergency fund of around three months’ worth of rent and bills. This covers you in the event of job losses or other disasters. Then, start to put money away for the long term. Consider stocks & shares ISAs, ITFs, or other investment methods. Investing a little now may well repay you a lot in the future, and it is certainly worth doing with any and all spare cash you have.
These tips should help you start to pave the way for better financial management and long-term financial freedom. It has never been easier to observe and manage your finances, so it’s never been a better time to start! Good luck with your personal finance management journey.