Do you feel in control of your money? Knowing exactly what’s coming in and out and what you’re working towards can help you make better financial decisions on a daily basis. You’ll be empowered to spend smarter, at the same time as spotting opportunities to save. Tight budgeting is also especially important in 2022, given the rising cost of living in the UK.
All that being said, almost 40% of adults don’t feel confident managing their money. It’s often bemoaned that we’re not better educated on money when growing up, so it’s no surprise that so many people struggle to stay on top of things. But that’s not to say that you can’t make a positive start today.
Read four practical tips on planning your monthly finances below.
1. Track your income and outgoings
No matter how big or small, every budget starts with looking at how much money is coming in each month and tracking where it’s going.
Finding your income should be relatively easy by checking payslips and incoming payments and transfers. For your outgoings, you’ll need to record all your essentials like rent, energy, and water by looking through past bills and receipts. This step will be easier if you use online or mobile banking.
2. Work out what’s leftover
Comparing your monthly income to your committed outgoings will show you how much you have leftover for everything else. That could mean what’s available to put into savings, plus your spare funds for things like clothes, entertainment, and socializing.
If your current outgoings are higher than your income, you’ll know right away that you need to make some cutbacks or find extra funds. A line of credit, rather than a payday loan, can be a better option if you need access to cash quickly.
3. Set savings goals
Following on from the point above, it’s smart to save at least some money each month if you can. Setting savings goals is a great way to work out how much you want to save by when – and it can help to motivate you to stay on track.
Common short-term savings goals include things like paying off debt, buying a new vehicle, and starting an emergency fund. Longer-term goals are targets such as house deposits and even retirement.
4. Automate your bills
Even once you’ve noted down all your bills for things like shelter, utilities, and credit repayments, it’s still easy to forget to pay them – especially if they have different payment dates.
Setting up automatic payments is an easy way to eliminate this risk and save yourself any worry or hassle. Consistently paying your bills on time is a great way to build a healthy credit score, too, which could pay off in the future.
Are you on top of your monthly finances? Follow these tips to get your accounts in order.