If there’s one thing that just about everyone has in common. We all worry about money from time to time. No matter who you are or what your personal circumstances are like money is likely to be a serious driving force in our lives. Of course, that doesn’t mean that enough people are taking it seriously. Many people look at the financial disaster of 2008 and the struggles people went through and see it as a thing of the past something that they no longer have to worry about. However, times are tough and there’s a risk that people can end up in the same kinds of situations that they found themselves in almost a decade ago. Because of that, many of us should start thinking more seriously about our finances. We may have been able to get away with treating them frivolously before, but now it’s time to get serious. Here are some important things that we all need to start doing with our finances in order to avoid getting into any kind of trouble.
The first thing that anyone should do when it comes to building a more responsible relationship with their finances is to create a budget. Your budget should clearly lay out all of the income and outgoings for your household. Don’t just focus on the big stuff either. Of course, it’s important that your rent, energy bills, and car insurance are all included. But you should make sure that every other regular payment is included as well, right down to your Netflix account. Once you have a clear idea of your financial situation, then you can start thinking more clearly about what changes you can make in order to make sure that it’s as stable as possible. It’s also worth taking a note of some outgoings that, while not necessarily that regular, are still fairly frequent and consistent. Things like food and fuel costs are going to involve some variation from week to week, but it’s still a good idea to try and create an overall average that you can work from.
Be Careful When Borrowing
Too much borrowing was one of driving forces behind the financial crash of 2008, and with debt increasing in many households, experts are worried that we could be headed for the same fate pretty soon. The worst thing that you can do is to take on more debt than you can actually handle. Sadly, it’s also something that’s incredibly easy to do. Plenty of people are often tempted to use borrowed money like cash loans and credits cards as a sort of license to spend whatever they want. The problem is that you can’t just get something for nothing. Eventually, you’re going to need to pay it all back, and if you borrowed more than you can manage you’re going to end up in pretty serious trouble. Not only that, but it’s important to try and pay off your debts as regularly as possible. Debt isn’t inherently bad but going for long periods without paying it off can have serious repercussions for your finances. Your credit score has a huge impact on your ability to do things like apply for a mortgage or take out a loan, if you’re not paying off your debts your credit score is going to plummet through the floor, leaving you unable to achieve a lot of goals that you may have.
Everyone CAN Save
It’s not just those who are very financially comfortable that can save money. The truth is that anyone and everyone can save, it’s just a matter of how much you want to save and how disciplined you’re willing to be. If you look carefully at your budget, after you’ve paid off everything that needs paying then you’re probably going to be left with a least a little surplus at the end of the month. This is money that you can either choose to spend there and then, or to set aside in a savings account for a later date. The temptation among a lot of people is that they see the small amount left over and think of it as too small to be worthy of saving. However, the reality is that, no matter how small an amount it is, it’s always worth saving. In fact, you’d be amazed at just how quickly the small amounts of money that you set aside at the end of each month start to add up into a much more significant sum. It’s not always easy to save, but, if you’re willing to really make an effort then you will find that it offers you and incredibly useful safety blanket from and financial disasters that might come your way.
Mind Your Spending
People give all sorts of reasons and excuses when it comes to their finances but the main issue in many cases is that that they don’t know how to control their spending. I have seen this many times before where people spend money on things they really don’t need like a holiday and put themselves in greater financial debt to do this. Much like the attitude people have towards saving, a lot of people assume that a little bit here and there isn’t going to have that much of an impact on their overall financial position. The problem is that, just like with your savings, those little amounts start to build up pretty quickly. Spending money in the tens and they turn into the hundreds much faster than you might ever expect. Self-control is the only real solution here. By being able to look carefully at the budget that you’ve created you’re able to avoid letting temptation get the better of you because you can clearly see exactly how much money you can afford to spend on luxuries at the end of each month. When you are able to see your finances clearly you have officially run out of excuses to spend money that you simply don’t have.
Do you control your spending or is this something that you need to work on?
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