Are you looking to manage your money and become more financially independent? Many people these days find themselves in a rut when it comes to their finances. The good news is there are plenty of ways you can better manage your money and work towards financial freedom.
1. Track your spending
In order to get your finances under control, you need to work out where you're spending money. Track every purchase that you make over the course of a month. Split it down into categories to make it easier to add up. How much are you spending on bills? What amount do you spend on little treats for yourself? The little purchases soon add up and you might just be surprised by how much you're actually spending on small one-off purchases.
2. Create a budget
Once you know how much you're spending, you can work out a proper budget. Know how much you have coming in each month and then deduct bills and other necessary outgoings. You can then savings or spending goals for the money you have left over. You want to aim to spend less than what you're earning.
3. Clearing any debt
Debt is something that many people are living with these days. If you have any debts, now is the time to work on clearing them. The sooner you are out of debt, the more financially secure you can become. Any money you have set aside for savings should be put towards paying your debts, whether a payday loan (the stuff offered by companies like this) or an outstanding credit card balance. Clearing debt (on time) actually reflects positively on your credit rating as a ‘responsible borrower'!
4. Consider applying for a credit card
If you don't currently have a credit card, now may be the time to apply for one. Having a credit account can help to improve your credit rating. Provided you only use it sparingly, a credit card can do wonders for your credit score. They are also fantastic in emergency situations.
5. Resist impulse buys
One of the most damaging things to your monthly budget is impulse buys. How many times do you buy something without thinking because it was on special offer? Get into a routine of asking yourself if you actually need what you are buying. If the answer is no, don't buy it. Over time you'll learn to become more sensible with your spending.
Before working out how to improve your situation, it can be a good idea to check out the top financial mistakes people make. Forbes has published an interesting article on the top mistakes to look out for.
Overall, the key to managing your money is knowing exactly where it is going. Get into a routine of tracking your spending and monitoring your budget. This will help you to start becoming more financially secure.