It’s important that we have a firm understanding of our finances – especially now. With the cost of everything from energy bills to food going up and the rate of inflation soaring, it’s clear that we are still in a cost-of-living crisis.
In order to ensure that you are managing your money in the best possible way during this economic lull, it can be helpful to focus on what your finances look like right now and how you currently manage your money. From there, you can introduce new ways to organise your income and outgoings.
Here, we look at ways to oversee your finances in a way that works for you.
Why is good money management important?
As well as the practicalities of having good financial practices in place, being aware of where you are money-wise is good for your own wellbeing. If you’re under financial pressure or you’re worried about how your bank balance is looking, this can lead to sleep deprivation, stress, and even depression.
This, in turn, can impact on both your personal and professional life. Then this becomes a cycle, where money worries lead to stress so you can’t live or work well, and then not being able to do your job or speak to loved ones about your finances can make money management even trickier, leading to more stress.
By getting to grips with your finances, you can break the cycle. Introducing good organisational ideas and practical strategies can make a real difference. Some ways to transform your money management include:
- Create a budget
You might have worked to a budget before, but with things going up in price, now is a good time to make some updates to your approach. Look at your income and outgoings and work out what’s coming up. This will help you account for anything that’s going up in price. It will also help you to shop around for better deals on things like phone tariffs and the food shop.
From there, you can work out how much you need to allocate for everything that’s going out of your bank and see how much you have left after everything’s paid.
- Separate spending
To help make budgeting easier, it’s worth looking into setting up separate accounts for different things. For instance, you might want to set up a utilities account, one for your savings, and another for disposable income. This helps to clearly define where your money goes and what it’s being spent on.
- Get help
Money worries are nothing to be ashamed of. Now, more than ever, there are people who are finding things hard. But there’s no shame in calling in expert help if you need it.
There are financial wellbeing packages offered by employers, where money education is becoming a hot topic. There are also professionals such as estate lawyers who can make sure you’ve properly documented where you your money to go and other advisers who can recommend the best savings accounts. Take the time to use these services if you need them.
- Review regularly
The picture is changing all the time, so schedule in time to review your budget and make any changes that are needed. You might find that your energy bill changes, or you need to budget differently for food. It’s good practice to review and update your budget every so often.
How will you organise your finances?