Whether you want to buy a big house in a nice neighborhood with good schools, invest a lump sum in building a promising startup or purchase the best medical care, how you manage your money will determine the quality of life you can afford.
But if your money management skills are getting in the way of fulfilling your aspirations, this guide can help you get your finances in order fast with these five easy money tips.
Spend Less Than You Earn
The concept makes sense but putting it into practice is a distant dream for many.
To achieve spending less than you make, budgeting is an unavoidable prospect you need to endure.
So firstly, note down everything you earn each month, then list and subtract all of your expenses from this figure.
If your essential living costs, subscriptions, food shopping bills, etc., outweigh your income, cutting back and reassessing your money’s purchasing power is crucial.
Thinking of cheaper ways to make your money go further can help. For instance, you could cancel a routine hair appointment and instead do it yourself with a box of hair dye from the drug store.
In another instance, you could opt to study for a degree online, which costs less than attending university in person.
Or you could cancel unused subscriptions for magazines, the gym, and movies.
In some instances, it’s better to take out finance to purchase something you need. For example, if you need your car to get to work, but your tires are too worn for you to commute safely. You could opt for a finance option to split the cost into affordable payments.
But be savvy, and look for plans with the lowest interest rates you can find, or 0% interest-free periods, to reduce the cost of borrowing. This way, you can avoid paying more than you need to.
Rainy Day Fund
Try to save an emergency fund that can cover unexpected expenses. Be it for a burst pipe in the house, a vet bill for your pooch, or losing a job.
Emergency pots should ideally cover three months of essential spending (such as the mortgage, utility bills, and food).
With any money you have spare each month, create a standing order and send that cash to a separate account to build up an emergency fund.
Cashback and Loyalty Schemes
Never underestimate the power of cashback and loyalty schemes which can reward you for your spending.
Whether signing up for a loyalty card from the petrol station you always use. Or becoming a member on cashback sites to gain a percentage back on your spending each time you shop.
Over time, those points and pennies add up to free lump sums of vouchers or cash, which can bolster your income and give you more money to save or spend.
Buy Quality Goods
When purchasing goods, such as electronics and clothing, consider quality over price. Because being savvy with money isn’t always about buying the cheapest items you can find.
Let us explain – so if an item is made the same regardless of where you purchase it from, it makes sense to buy the cheaper version of that thing.
But, for goods, where the quality, per the materials described and reviews, reveals that an item’s durability and longevity are different depending on where you buy it. It pays in this instance to buy the quality product over the cheaper one because it’s much more likely to last longer and avoid breaking.
Whereas if you purchase a cheap product renowned for poor quality, you will have to rebuy the same product when it breaks, meaning you spend more in the long run.
Managing your money effectively by using the tips above will help you;
- Free up cash in your income to spend and save
- Help you borrow money at the lowest rates
- Save an emergency fund
- Make money while spending money
- And purchase things you need that will last to avoid the prospect of rebuying