Financial security is a priority for everyone, especially during the current climate, but maintaining healthy spending habits isn’t as easy as we’d wish.
Social media bombards us with products and promotional offers every day, prices are rising rapidly and energy bills are soaring.
With an ever-rising cost of living, it’s important to be more mindful of consumption and spending habits to achieve financial stability.
Below are a few pointers to help to develop healthy money management routines.
Know where you are
Start by reviewing your finances to know where you stand.
Analysing your incomings and outgoings will help you to learn your strengths and weaknesses before deciding on the relevant adjustments.
You might be spending too much on goods that you almost never use, or it could be a case of needing to swap taxis for public transport or walking.
If you’re paying off any small loans that you’ve taken out, make sure that you include that on your list of expenses and follow the snowball method, which means starting with your smallest loan as soon as possible.
Make sure that you’re aware of all the benefits to which you’re entitled and claim them where appropriate.
Plan your budget
To establish a strong financial foundation, you need start by planning your monthly budget or updating your current one.
Based on your long-term and short-term financial goals, see where you need to save and where you might be overspending.
When creating new financial habits, it’s important to strike a balance between immediate expenses, such as travel and home repairs, and big-picture costs like starting a business and saving for a child’s university fees.
Look at your utility bills and consider switching suppliers if necessary.
Most importantly, secure an emergency fund. This is money that you set aside for unpredicted events, such as unexpected medical bills, losing your job or car repairs.
Think through each purchase
Instead of simply going for cheaper items, consider their long-term use – it might be more sustainable to invest in a pricier alternative.
Beware of impulsive purchases and, before overspending on that one thing that you really want, consider the bills and the reasons why the item may – or may not – be a good use of your money.
Whether you’re looking for the cheapest option or burning to buy an expensive item, create a breakdown of the cost per use in your head or on a piece of paper.
For example, it would be more efficient to invest in a high-quality pair of trainers that would last for months over something cheaper and flimsier.
Sales and promotions are always tempting, and they seem good for your cash pot – which could be true – but, even when taking advantage of seasonal discounts, make sure that you stick to your monthly budget.
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