How To Manage Your Money Better

How To Manage Your Money Better

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26 September 2022

There’s no shame in not knowing how to manage your money. In the US alone, a survey
found that many people don’t have emergency savings at all, and even if they do, the
money they have usually wouldn’t cover their expenses for more than a few months at
most. Sometimes, improving your financial circumstances is beyond your control, but at
other times, building your money management skills can be the difference between
comfort and struggle. Here’s how you can manage your money better, starting right
Know your credit score
One of the first steps you can take to improve your money management skills is to
know what your credit score is. This figure is extremely easy to look up, and it dictates a
huge amount of your financial life; whether or not you’re able to get a mortgage, for
example, is directly tied to your credit score. Everything you’ve borrowed will contribute
in some way to this number; if you’ve ever taken out £1000 loans then they’ll be
reflected on the score, so it’s important to know your credit score and keep it in the back
of your mind.
Make sure you have a budget
There are many people out there who don’t have a budget, even though it’s extremely
easy to create one. The effort required to build a budget is dwarfed significantly by the
benefits you’ll reap from having one; it’ll give you a greater understanding of your overall
financial health, as well as showing you any courses of action that might be available to
you in terms of improving your finances. All you need to do is count up your income and
spending, and voila: you have yourself a budget!
Pay off loans on time
It might sound obvious, but you should make sure that you’re paying off your loans on
time where possible. Missed payments can quickly accrue extra interest or fees, and
this can lead to a debt spiral that’s difficult to escape. Paying off loans early isn’t always
a good idea; sometimes, you’ll incur early repayment fees, because lenders make
money from loan interest. Just make sure that if you do take out loans or credit cards,
you’re making prompt repayments.
Spend mindfully

Spending mindfully can be a difficult habit to acquire, but it’s necessary if you want to
manage your money more effectively. Mindful spending requires knowing exactly what
you’re spending and when; pay close attention whenever you hand over your card or
some cash, and you’ll be spending mindfully. This might sound obvious to you, but it
isn’t something everyone does; many people will spend without even realising what
they’re spending their money on, believe it or not.
Withdraw cash
Many people swear by withdrawing cash as a way to more effectively manage their
money. Since cash is more physically visible than the amount available on a debit or
credit card, you’ll know exactly where your limit is and be far less tempted to spend
beyond it. When you physically hand over cash as part of a transaction, it feels like
actually losing something, too, whereas swiping a card or using contactless payment
doesn’t have the same impact.
Start saving
If it’s possible, you should start setting aside a certain amount each month as part of a
savings pot. You might be living paycheck to paycheck, and if you are, then it’s definitely
worth trying to speak to a financial advisor, because they might be able to help you. If
your budget shows that you’re in the black, though, then you should be putting away
some of your money into a savings account. Interest rates might not be strong right
now, but a savings account will give you peace of mind nonetheless.
Use apps
There are many apps out there that will help you to manage your money. Both Android
and iOS have plenty of apps on offer, so no matter what your individual taste or
requirements might be, you’ll almost certainly find at least one app that meets your
needs. We’d recommend starting with Emma, which has a huge amount of features and
can help you to create and maintain a budget for yourself. It’ll also make spending
suggestions and show you a breakdown of your spending.
Start investing
It’s in the best interests of many stockbrokers and other financial professionals to make
investment look a lot more difficult than it actually is. While there’s a certain amount of

luck involved in speculation, the fact is that investment is extremely easy and
accessible to everyone, so you should start doing it if you’ve got a reasonable amount of
money to invest. Having a good investment portfolio can result in some serious returns
for you, so look into this possibility – you might be surprised by what you find!
Optimise your bills
With the cost of living crisis looming and energy bills soaring, optimising your bills is
much more difficult than it used to be. However, it’s still worth shopping around to see if
it’s possible to get a better deal than the one you’ve currently got. You never know
where you might be able to make some savings, and every small amount you can save
might help somewhere else. Look for better deals on things like broadband, phone
contracts, and subscriptions, because you might be able to find a service that’s similar
to the one you’re currently getting and pay less into the bargain.

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