It's all too easy to lose track of your personal finances when you are busy. But do you know how much you are spending each month? And do you know how much you need to live on?
Here are a few suggestions you could put into practice: 1.Track your spending
As a good starting point, keep a note of how much money you are spending and your outgoings. Keep a log of your main costs like your mortgage/rent payments, household bills, fuel, council tax, loan repayments and credit card bills.But don't forget to then include purchases made with your debit card and cash that you may have forgotten such as your daily coffee, magazines and travel tickets. You will be surprised how quickly these all add up.
To make it easier, there are a variety of mobile apps available to help you track your spending including Expensify which is available on iOS
. 2.Create a budget
Devising a budget isn't the most exciting of tasks but it is vital to keep you on track. Once you have tracked your spending, this will give you a much clearer idea of how much money you need and where you are spending it.
Try to allocate how much money you need for each category such as housing, bills, food, transport and leisure, ensuring that you have enough income to cover each of those expenses. Set a realistic budget as it will be easier to stick to. There are some essentials you simply cannot cut back on, so you may just need to review your spending on whether to buy some luxuries or save for something special that's your call.
You don't need any complicated tools to create a budget.You can set up a spreadsheet or just download one of the many budget apps available. Expense Manager
, is a free app which allows you to create a budget and input expenses.3.Set some goals
As part of managing your finances, it's worth considering some long-term financial goals. It's never too early to start thinking about retirement even though, it may seem in the distant future. Are you on the property ladder? Or maybe you're thinking of starting a family and need to exchange your sports coupe for a more practical child-friendly car. Having financial aims will help you meet your lifestyle goals.4.Build an emergency fund
Consider having an emergency fund - essentially a reserve of cash that will keep you going in the short term should something unexpected occur. This should tide you over if you face any unexpected expenditure, such as car or laptop repairs.
The amount you save will depend on your lifestyle and circumstances, but we usually recommend the equivalent of three months' net income. Keep this money where it is easily accessible.5.Don't take your eye off the ball
Now that you have set a budget, continue tracking your spending to ensure you are not exceeding your limit. Try and update your budget monthly and quarterly, and potentially undertake an annual review, because so much can change in a year. You may even consider making an appointment to see a Financial Consultant who can give you specialist financial advice to meet your needs future planning needs.
A personal loan can help if you have large bills to pay, for example from credit cards. As part of your review, check your credit score to ensure your details are correct. Incorrect details on your credit file could affect your loan and mortgage applications.