Hi guys! This post is a little something different. About 3 months ago, I posted a video about Money Management on my YouTube channel. It was something I had been wanting to film for a while but I just didn't feel entirely comfortable doing so. However sometimes we have to take a step outside of our comfort zone. So what I am doing now it following it up with a written version for my blog. I feel that it is necessary for me to portray myself on my blog exactly the way that I do on my YouTube channel. So because this topic is something that I feel is extremely important for everyone to be discussing, I will be sharing my 5 top tips for managing your finances.
Not that I am a professional or anything but I know from experience a thing or two about getting organised with your money. Also because I work within a bank, I have picked up some great ideas that have massively helped me. Therefore I want to be able to share my ideas in the hopes that I can help someone out there become a bit more confident when it comes to keeping a healthy bank account.
1) Evaluate your situation
This tip comes in handy to give you a reality check. Get a financial diary and a pen and carry it around everywhere you go. Write down your income and then essential spending i.e. car insurance, phone bill, gym membership. Then you should be writing down every single thing that you are spending your money on. If you buy a drink, lunch, go shopping, pay for your car insurance, anything that goes out of your account, write it down. After you've assessed what you're spending, if it's more than your actual wage, then you're in trouble. If it's breaking even, thats great but, you won't be putting anything towards your debt or saving.
Doing this will give you so much perspective as to where your money is going. It helps you to understand your own spending habits. If you don't evaluate your spending habits, then trying to develop healthier habits will not be as easy.
2) Cutting back
Now that you know where your money is going and you understand your spending habits a bit better, you need to see where you can start cutting back. Evaluate your outgoings to see what you really should be spending on and what is essentially a waste of money. For example, you might have a £20 gym membership, but how often do you go to the gym? Or maybe you have a Netflix account, but you don't really use it. Perhaps you buy lunch out everyday when you could be bringing a packed lunch to work. All of these little things start to add up and eat into your disposable income that could be put to better use.
3) Bugeting
Now that you know what you're spending each month, we're gonna do a little simple math. Write down what your income is. Then subtract what your essential expenses are i.e. travel costs, bills, food shopping. Whatever you have left after your essential expenses are subtracted is what is called your disposable income. This is what you can use freely. Then you have to give yourself a realistic budget. Whatever that budget is has to leave you with money left over to put towards debt/savings.
The best way to ensure you stick to your budget ties right back into tip #1, writing down everything that you spend. As long as you write it all down you know you won't be losing track of where you're at with that months allowance. The best way I found to help manage it better it to split my budget over the 4 weeks in a month so I had a weekly budge instead of a monthly one. Way easier to keep track of.
4) Multiple accounts
This tip is my favourite one. Once I started doing this I really got organised and was able to manage my money 10x easier. I picked up this idea from where I work. I found that what a lot of people were doing was having more than one bank account. One account would be where their money gets paid into and their essential expenditure would go out. Then they would have a second account where they would move the money that was left over, the "spendings" account. The third account would be a savings account.
By doing this and splitting your money in 3 ways, you're ensuring that you have the money for everything you need it for. By not keeping your money all together in one place, you're making it easier to see what you can spend and what you can't. This helps you to never go over budget because once your account is empty you have nothing left to spend. This way your forced to make sure you're spending wisely so you don't run out of spending money. It also ensures you have money to pay for all your essential expenses because that money has already been put aside in a different account especially for those costs.
5) Find ways to earn more
This tip can be pretty useful if you have the time, energy and patience to put it into practice. One of the things I do mainly is just work as many hours of work as I can. But also having multiple streams of income is a great way to help with debt and savings. You can always have a steady income from your full time job, however having little side ventures and ways of bringing in some extra cash make saving and getting debt free much easier. If you have a creative talent you can sell your work online, or perhaps you're great at a second language and offer tutoring online. Another way is to clean out your house of unused possessions and sell them on websites like Depop, Ebay and Scpock.
So these are my top 5 tips for money management, down below I have linked my youtube video on this in case you wanted to check it out. But all these tips are tried and tested and have 100% worked for me. So if you guys have any other ideas/tips to share I'd love to hear from you. Just comment down below.
TC xo
Comments
Post a Comment