There’s never been a better time to get a handle on your finances. For lots of people, the rising cost of living in the UK has made it important to count every last penny and find ways to make money go further. While many such factors are out of our control, there are ways you may be able to improve your situation.
Asserting control can not only strengthen your financial prospects and opportunities in life, but it could boost your mental well-being too. On the other hand, living in financial ignorance or chaos may bring immense stress on top of the practical implications.
Below, we explore common financial issues that people struggle with and offer actionable tips on managing and overcoming them.
Do you regularly spend beyond your means? It may seem like an obvious, often-said tip, but budgeting really is the foundation of financial control.
By totting up your expected income and outgoings on a monthly basis, you’ll make better-informed decisions about how much you spend on what.
As part of your budget, you’ll allocate money towards essentials such as rent or mortgage payments, bills and food. Setting this money aside early will make sure you cover the basics before anything else.
Having No Savings
Research from the Money & Pensions Service shows that a shocking one in six adults have no savings, while five million have less than £100. This makes it more difficult to deal with unexpected costs or emergencies, as well as larger purchases.
One tip is to make savings one of the categories in your budget. Many experts advise aiming to save 20 percent of your income, but any little helps. Automating payments into a separate account will help you keep anything you can save aside.
Having Bad Credit
Having bad credit can restrict your options in life. More lenders may reject you, though bad credit loans do exist if you need to borrow. Whatever the case, there are lots of ways to build your credit score.
Paying bills on time is crucial for showing you’re reliable, so set up automatic payments if you haven’t already. There are several quick steps you might not realize too, like registering to vote in your local area and checking your credit report for errors.
Getting Stuck In Debt
While some debt is normal in life, bad debt can become harder and harder to escape from if you’re not careful.
If you do have debt hanging over you, prioritize paying it off over ignoring it or making it bigger. Avoiding bad debt is crucial for your financial freedom, so try to avoid the temptation of credit cards and costly payment plans if you can.
Can you relate to any of these financial challenges? With the right tactics and mindset, you could quickly get your finances in order.