Some of us find it harder to manage our money then we care to admit. If you’ve got into trouble with money recently, then now can be the time to change that. Money troubles can come after a job loss, unexpected expenses, or bad habits with your money. Bad credit can make money problems even worse, but you can put it right. Here are some of the best money habits to learn right now.
Learn more about personal finance by reading ‘Preparing For A Recession: Embracing Your Personal Finances’.
1. Always pay your bills on time
Late bills will generally end up costing you more in the long run, as late payments are usually joined by late fees. Payment history can also have an effect on your credit score, so paying on time is a very good habit. Keep things organized to make paying on time as simple as you can.
Put your bills on autopay and set up direct debits to pay them at the same time every month. Any bills that you can’t do this with should have their due dates marked clearly on the calendar, so you know what is due to be paid and when.
2. Create a budget
Budgeting isn’t meant to restrict your spending and is actually a plan for your money.
Work out exactly how much you have coming in every month, and then calculate how much goes back out. Include your bills, and work out an average for spendings like the grocery shop and travel. Decide on how much to put into savings and how much you want to have left for fun money. Stick to your budget so you won’t overspend and get into debt.
3. Invest regularly
If you want to generate more savings, investing on a monthly basis is a smart way to do this if you’re sensible about it.
An easy way to invest is through a company arranged pension scheme or 401(k). Ask your HR department about how to enroll and have your contributions automatically taken.
If your income increases, invest more. The more you can invest in a pension, the more you will have to live on when you retire.
4. Keep track of your finances
If you want to get a clear picture of how your financial health is, you need to monitor your finances. Watch how your net worth changes over time, and make sure it is moving upwards. Use a money management site or apps to keep track of your financial health.
5. Make savings a priority
Saving gives you a safety net for unexpected problems.
You could save to have an emergency fund, or have savings for a house or for anything else in your future. Saving money on a regular basis is the simplest way to make sure that your pot of savings continues to grow. Set up a standing order to automatically shift some money into your savings account on the same day you get paid.
If you never notice the money in your current account, you won’t miss it.