Whilst nobody wants to have to spend endless hours scrutinising each penny that comes in and out of their own personal bank account, by adding a few personal finance habits into our everyday lives we can gain control of our financial situation.
By allocating just a few minutes of our time, we allow ourselves to take charge, finding out exactly where all our money goes to at the end of each month!
These are ten very simple, but extremely effect, personal financial habits which I personally recommend that anyone can incorporate into their everyday lives with ease:
- Budget, Budget, Budget: I can’t stress enough the importance of keeping a budget of some sort to track your personal finances. A budget will ensure that all incomings cover all outgoings, allowing you to manage your money wisely and perhaps even have a small amount left over which you know you can use freely, as all else is accounted for.
Whether on a piece of paper, a spreadsheet or a whiteboard, write up a monthly or weekly budget that suits your circumstances, to keep control of your future finances based on this information.
- Write Up Your Shopping Lists: Always make a list before you hit the shops for your weekly or monthly food shop so you can initiate a budget before you go. This makes it easier to stick to as you walk around. Better still, if you haven’t already, take advantage of online shopping. With click and collect or delivery direct to your home, shopping online usually means you get exactly what you initially planned to get but don’t get tempted by the special, and often irrelevant, instore offers. For further help with your shopping list, draw up a meal planner so you know exactly what you do and don’t need before beginning.
- Make Bills Your Priority: Get the important stuff out of the way first, for example your main bills such as rent, mortgage, gas, electric and water. Then allocate for the food and the car. Once this is done, you know you have a roof over your head, running water, heating and lights, food on the table and transport to get you to and from work. Covering all the essentials such as this gives you an opportunity to thoroughly track what is left behind each month and gives you room to make necessary adjustments if you want to or need to.
- Put Money Aside: Keep a rainy-day amount set aside, just in case. The jury is out as to how much this should be – some say a week or two, but I suggest at least two months is a better figure. That way you give yourself a good chance to cover several bills and expenses at short notice should you need to. At least this way you keep up with your payments and don’t fall into that deadly arrears trap.
- Plan for Yearly Occasions: Christmas just doesn’t spring up on us out of nowhere; it is the same date every single year! Okay, so in January, Christmas may be the last thing on your mind, but as this and other such occasions as birthdays are inevitable, preparing a plan of action money wise will stand you in good stead each time. Many people end up in serious debt at the beginning of each new year; but if you’ve planned effectively and haven’t over spent at Christmas because of this, you will be able to pick up quickly financially after the major event.
- Be Brand Savvy: Don’t be afraid to try cheaper variations and alternatives to your favourite brands. With so many discount chains regularly opening as an alternative to the mainstream, such as Savers, Poundland and B&M Bargains, it has never been easier to try out different and cheaper brands without losing out financially. But, if you really can’t prise yourself away from the top well-known brands, these stores will at least be able to offer it at a cheaper price than usual supermarkets!
- Check the Market for Deals: Keep up-to-date with all your current insurance plans and credit card rates. Make sure you allocate an hour each year before renewal to look around at getting the next best deal that you possibly can. Many people openly admit to not having the time to look when their renewal comes around, and they simply allow their current insurance provider to automatically begin their next year for them without even looking for an alternative. This same advice relates to credit cards – if you can find a better balance transfer rate, then transfer any larger balances to it immediately, continuing to do so for a more beneficial rate whilst you continue to pay the remainder off.
- Maintain Your Assets: Take care of maintenance before it gets too late. The essential home items, the car, and even the pets, are included in this! If you regularly maintain the essential items, and furry family members, it means there is less likelihood of forking out for a big repair/vet bill when you need it the least!
- Plan Your Retirement: Though it may seem decades away, if you haven’t already started planning and putting something by a month at least, you put yourself in a difficult financial position for when that inevitable day comes. Automatic work place pensions are great for this, and one less thing to worry about. If you aren’t currently working, then put a small amount away each week or month. Every little amount helps and soon builds up.
- Don’t Ignore Money Problems: If you are struggling to pay a certain bill, get in touch with the company to inform them and possibly discuss a payment plan. Many companies, particularly big utility companies are great at this, provided you just tell them. Ignoring a debt and refusing to open these bills does not mean it goes away – it just continues to escalate potentially resulting in CCJ s and Defaults and yet even more of a bill to pay. Get on top of it and stay on top of it.
The idea of developing good personal finance habits is not to live like a pauper, cross examining everything that comes in and out with a fine toothcomb! Rather, it’s all about developing habits which will become second nature to you. It also means that in time, it may be possible to see small savings with more money staying in your account for longer. Now, who wouldn’t want to see such changes!