The personal finance habits you should adopt

It’s safe to say none of us are perfect when it comes to money and we could all benefit from giving our finances a regular check. If you’re looking to get a better grip on your money and develop better habits, setting yourself some financial goals and putting together a budget is a good way to keep yourself motivated. You can use a budget planner to organise your finances.

Priority outgoings are those that have the most serious consequence should you not pay them. They include your mortgage, rent, council tax and utility bills – you must pay these before you do anything else with your finances. It makes good sense to keep an eye on your credit card spending too and work out your budget to enable you to understand how much you realistically save each month.

Following a budget

The majority of people don’t follow a budget despite the fact it’s one of the most effective money management tools. If you’re eager to get a better handle of your finances, then you need to understand your income month after month. To create a budget, simply list your existing monthly expenses and compare it to what you earn. If you’re living payslip to payslip, examine your spending and decide what you can cut back on.

Pay your bills right away

To eliminate the risk of receiving a late fee or bad credit, make a point to pay your bills as soon as you receive them. Set up direct debits so that your bills are automated and the money will go out on a date set by you. Either way, taking this step will help you to determine how much money you can afford to save and how much you can leave in for spending purposes.

Have a rainy day fund

Everyone needs a rainy day fund. Have some money put aside for emergencies and those more exciting things in life such as a family trip, a child’s education or a wedding. For most of us having money that we can access quickly to pay for unexpected things such as unforeseen bills can be a real lifeline – especially if it builds up over time. You might also want to think about taking out a loan, such as a small loan as a way to help keep your finances in check during this period.

Another good thing to keep for a rainy day would be an MOT test paid for by Halfords Autocentre. All you have to do is pop into a store, buy something between now and October 14th, for as little as the price of an air freshener, and you’ll receive an MOT test valid until October 2019. Perfect for those of you looking to save some pennies throughout the year.

Live below your means

A simple trip to the coffee shop for a drink or weekly dinner nights out can soon eat away at your money. Believe it or not, cutting out a £2.50 coffee a day could leave you over £900 better off a year – that small daily change could save you hundreds a year and imagine the things you could do with that money instead.

When going out, only take the cash you absolutely need and don’t have your card with you. This way, no matter how tempted you are, you can only spend what you have in your pocket (or wallet or purse). If you don’t go to the shops quite as often, you can’t be lured into buying things you don’t need. Find something else to do – ideally activities that don’t cost money.
Make the most of your money

Once you have your debts under control and your emergency fund, it’s time to start thinking about investing in your future. A good way to start is with a stocks or shares ISA – they’re completely tax-efficient and offer you the opportunity to pay in large amounts of money, or make regular payments – whatever suits you best.