It’s not always going to be a smooth ride with your finances. There are so many things in life that can get in the way. For one, we just have to pay so much to actually afford the cost of living. There’s living expenses, car expenses, and pretty much anything else you can think of.
So, if your finances are sinking, we really do understand why they would be. There’s nothing worse than getting to a point where money does go downhill, so we’ve put together some great tips that should help you get your finances back on track in no time. Have a read of the tips below, and let us know if you’ve had to save your finances before, and how you did it!
Clear Your Debts
There’s a staggering figure with regards to debt. A report has shown that in the UK, people in total owned 1.583 trillion pounds in debt. A trillion pounds just in the UK. So it’s easy to understand why some of you reading this might feel as though your finances are sinking because you’re drowning in debt. Maybe not drowning, but it definitely isn’t helping your finances! There’s a few things you can do to try and reduce your debts, hopefully clear them, and build your credit score back up. For one, you need to figure out whether a debt consolidation loan is going to work for you. This is where you total up your debts across the board, and put it into one sum. Then, you lend that lump sum of money to clear all of that debt, that way only owing to one company. It makes it so much easier to manage, but there are usually conditions that you will have to meet.
Debt consolidation loans are great for those who are panicking about the many different payments they might need manage each month, and for someone who is looking for a more structured way to make the payment. Due to some of them having the condition of having to pay a certain month back to it each month, it has more of a success rate for actually getting rid of debt. We highly recommend you look into it if you haven’t before. To build your credit score up, you want to clear the debt down step by step, and then use things such as a credit card to build it back up. Make small purchases such as fuel, and pay it back every payday. It’ll slowly but surely rise. Once debts are cleared, make sure you cancel things such as store cards and online accounts that might have contributed to the rise in your debt.
Recover Your Finances
If you’ve finally got out of the cycle of being in debt, it’s time to let your finances recover. Now the weight is off your shoulders, you can think about setting up a proper savings account that you can use to actively save money. If you know you’re going to be someone who is always tempted to take out of the savings, then try leaving it in a restricted ISA account, only giving you access to withdraw a few times a year. That way you’re saving for a rainy day, which one day might actually end up being a nice treat like a holiday!
The only pain is that you wouldn’t be able to withdraw it in emergencies, such as if your car broke down and you needed to dip into your savings. Be strict with yourself in terms of what you spend your money on to begin with. In the beginning, your main focus should be to put money away, rather than use it on the luxuries in life. If you factor in one outing a month, or one treat a month, it shouldn’t take you long to build some good savings.
Start Better Planning
So, the end of our last section bring us nicely onto this one. Planning your money is such a great way of keeping within budget, and giving you a sort of visual guide as to what you can spend each month, and what you should be putting away. If you wanted to be extra efficient, you could download one of the many apps that there are to try and budget your money even better. Either way, just writing it down is going to help so much. Start by writing down your monthly wage. Then take away things such as household bills, a shopping budget, fuel and other car expenses, and anything else you can think of that you usually spend a month. You should be left with a figure that leaves you some to save, and a little extra to fall back on through the month that you can have access to. You could look to setup a financial plan too.
I recently came across a very interesting infographic which shows the fastest ways to save money. I’ve added it below as it makes a great addition to this article:
Bring Living Costs Down
So, when you’re writing that list, we guarantee that one of the biggest expenses was the daily living costs. In particular, household bills. They’re notoriously a nightmare, and a lot of people struggle to afford much after the rent and other bills have gone out of the account. So, weigh out your options, and see what you can do to save some money. One thing we would highly recommend is the use of comparison websites to view the different tariffs that you could be on.
Even things such as your internet and TV bill could potentially be high. If for example you have sky, and you have every addition that they offer, you’re bound to be paying a hell of a lot. Try reducing the number of channels that you have, or see if things such as Now TV are worth getting instead. It is a good idea to always get unlimited internet however. For the price difference that they charge, it really isn’t worth it to have anything less! It then gives you total freedom to use it however much you want during the month.
We hope that the few tips we have for you were enough to stop your finances from sinking. There’s always a way to get your finances back to normal!