According to our recent survey, 32% don’t budget their spending and 1 in 6 adults don’t save for their future. It’s important to monitor your finances and to set realistic targets to achieve better “financial fitness”. We’ve put together 10 tips to help you improve your finances…
1. Start Early
Whether you have started your first job, moved out for university, or bought your first house – it’s never too soon to practise good money management skills. Try creating a budget to set goals for spending and saving. This will help you learn how to stop spending and review monthly to keep on top of things and adjust accordingly.
2. Create new habits
Most of us are creatures of habit. If you want to improve your “financial fitness”, it may be time to form some new ones! Did you know that it can take 66 days to make a habit and 21 days to break one? Take some time to review your spending habits and identify areas for improvement. Start by recording your spending habits for a month and see if you notice patterns. For example, are you buying expensive weekly takeaways when a (much cheaper) frozen pizza would do?
3. Set limits
As part of your overall budgeting plan, it’s a good idea to set some limits for yourself and your family. Christmas and birthdays can be tempting times when it comes to splashing the cash, leading many to fall into debt purchasing the ‘perfect’ present– be realistic about what you can afford and don’t be tempted to rely on credit.
4. Look at the little things
Every little helps – not frequently spending small amounts can soon add up to big savings. That morning coffee that sets you back £2.50 a day equates to £75 a month! To help you improve your finances, think carefully about how you spend and where you can make simple savings on small things.
5. Start saving
Worryingly, one in four UK adults has no savings due to not being able to find the money to put away each month. Look at non-essential spending such as bought lunches, coffees on the go and takeaways to save the cash. Even small savings are worthwhile.
6. Protect your income
Nobody can predict the future and unfortunately, accidents and illnesses happen. Think about protecting your income to safeguard yourself and your family if you were unable to work. According to our research, 61% would last for a year or less without any income. Income Protection could help to pay the mortgage, rent and household bills if you no longer received your monthly wage.
7. Plan for retirement
Many see retirement as something to think about many years down the line but planning for retirement is crucial to help you secure your financial future. Find out what you are entitled to with your state and workplace pension, or, if you’re self – employed investigate what pension options are available to you. Discover why you should start preparing for your retirement early here.
8. Deal with debts
Most people in the UK have some sort of debt, with the average person owing in the region of £8,000, it’s an unfortunate part of life . Aim to spend a reasonable percentage of your monthly income on clearing debts. It is a good idea to clear any debts with high interest rates first. You can find more information about UK debt here.
9. Emergency fund
The unexpected can happen and if you’ve worked hard to improve your financial situation, the last thing you want is to spend your savings on fixing the boiler. Try to put around two months salary aside to create an emergency fund to avoid borrowing or dipping into savings.
10. Review the data
Is essential financial information, such as current account balance easily available to you and do you check it regularly? Also, be sure to review your savings plans and insurance policies on a regular basis to check that you are getting the best deal available to you.
Start today by reviewing your saving habits and see what changes you can make to become more “financially fit”.
