The tech revolution was supposed to make our lives easier, but is it us or are we busier than ever? Between work, family and status updates, it feels like there’s not much time left for all the other things. Like our finances. Well don’t worry, we’ve pulled together five tips to make managing your finances easier (you can thank us later)…
1. Take 10 minutes to write a plan – right now
All good things start with a plan. That’s all a budget essentially is. And it’s super easy to do. Grab a pen and paper and list what money you have coming in every month in one column and what money goes out in the other. Then subtract the second from the first. You can even download a budget planner online if you prefer.
Account for everything from toothpaste to your gym membership. Take whatever is left and direct a small portion to a short-term fund (for unexpected payments such as repairs), and a healthier sum to a long-term savings account. If you’re not sure how much should be spent on what, a good tip is to use the 50-30-20 rule.
2. Be a mindful spender
In the age of contactless, it’s so easy to swipe and spend. But with your budget, you’ll know how much you have for food and other purchases and will appreciate what is a reasonable price. Then all you have to do is take a mindful approach in shops. This simply means asking yourself:
- Why you’re buying something
- Whether the cost is worth it
- And if it isn’t in your budget, what you’re going to sacrifice instead.
Since studies suggest paying by card can actually ‘weaken impulse control’, encouraging us to spend more and on more unhealthy things too, going shopping with a list and cash to pay with helps. Or just do your food shop online.
3. Schedule reminders
We never stick to goals when they’re too overwhelming which is why you need to break up your savings goals and tackle them separately. Right now, schedule:
- 10 minutes every Sunday to make a food plan.
- 10 minutes the last day of every month to review your monthly budget and any debt repayments.
- 1-2 hours every 4 months to look at things like insurance plans and phone or energy tariffs (and deciding whether to switch supplier to save money), and review your savings goals such as switching to an ISA with a better interest rate.
4. Increase your contributions
What you never had you won’t miss. Most of us now have a workplace pension thanks to the government’s auto-enrolment scheme. Get in touch with them to increase your contributions based on what your budget shows you can manage. If you don’t have a pension, ask your employer about it or set up your own.
5. Let tech help you
Tech can be a distraction but there’s no denying it’s streamlined many aspects of our lives. Consider switching to a smart meter to track your energy usage. And instead of standing in line at the bank or Post Office to pay bills, download your bank’s app and manage your finances through your phone or internet banking. Most can break down where you’ve been spending too much, help set savings goals, and put aside a set amount each month into a savings pot or round up change from each transaction you make.
If you’d like to have a portfolio of investments, using an investment management tool like Moneyfarm is an easy way to go about it. Once you sign up, an algorithm will match you to the best portfolio to suit your needs. You can also set up a stocks and shares ISA or a personal pension all from the same place. All you need to do is credit your funds!
There, that wasn’t so bad was it? If you need any more advice, check out our blog or get in touch today.