While the basic concept of money management may seem relatively simple, the statistics suggest that many households and individuals struggle with this.
More specifically, around 39% of British adults (20.3 million people) don’t feel at all confident about managing their money, while 11.5 million have less than £100 in savings.
With a further nine million of us in serious debt (of which just a third receive help), there’s a clear issue that households need to tackle when managing their cash. So, here are some tips to help you on your way!
1. Think About Your Budget
Money management issues may also have been exacerbated by the coronavirus pandemic, which is being linked with so-called “reopening anxiety”. This can cause increased stress about spending, while Covid-19 may also have triggered a shift in your earning status or capability.
So, it’s important to consider your budget carefully at this time, as you look to account for any changes made and ensure that you’re spending within your means.
If you find that you need help managing your spending, you should consider taking out a prepaid debit card from Suits Me. This will establish clearly defined spending limits, which can be set ahead of time in line with your budget and help to reflect an altered mindset when planning your finances.
2. Prioritise Debt and Reduce This Where Possible
One of the biggest causes of anxiety is mounting debt, particularly once accounts begin to accumulate interest and your minimum monthly repayments aren’t even enough to eat into your initial liability.
This issue is particularly prevalent in the case of personal loans and credit card debt, where late or missed payments can cause significant issues and ultimately cause people to lose control of their total liability.
So, prioritising debt and utilising your disposable income to pay down debt and prevent interest from mounting is crucial as the old economic normal returns, particularly with payment holidays likely to end in line with the furlough scheme in the near-term.
Start by listing your debts and breaking them down into manageable repayments, while maintaining open lines of communication with creditors and creating solutions that are viable for all parties involved.
3. Set Goals
Last, but by no means least, you’ll need to set new financial goals as we emerge from the pandemic and things get back to normal.
These will need to reflect both your circumstances and long-term financial objectives, as you look to strike a balance in the near-term and create clear metrics by which to measure your efforts.
Your goals will vary depending on factors such as your age and status, as you may want to buy a house in the next five years or save towards the launch of a business.
The key is to create manageable time-frames and adjust these as and when required, while ensuring that you constantly work towards these through your everyday actions and purchasing decisions.
