In the UK, the cost of living has put a major financial squeeze on millions of households. Inflation has not only made the cost of the weekly shop more expensive; it’s also pushed up income tax levels, thanks to a phenomenon called ‘fiscal drag’.
Tips to Improve Your Finances
Coping with this situation means being able to manage your finances properly. But exactly how can this be done? Let’s take a look at a few worthwhile tips.
Tracking your spending
If you’re spending money on frivolous things, then you’ll find it more difficult to pay for the essentials, and to save money for the things that matter to you in the long-term. This doesn’t mean we have to dispense with luxury items altogether – but, ideally, we should spend in a more conscientious and mindful way.
Tracking your spending is now easier than ever, thanks to banking apps and digital records. Every month, sit down to review your spending, and see if you can eliminate any frivolous expenses.
Budgeting
If you’re suffering from financial stress, then coming up with a budget can be enormously helpful. Your budget should incorporate your income and expenses. It’ll provide you with the reassurance that you’ll be able to meet your financial goals in a given month – provided that you stick to your commitments.
Break your budget down into key areas of spending. These might include bills, groceries, insurance and loan interest. After that, you’ll have travel expenses and things like gifts for birthdays and weddings, and leisure activities. If you have a gym membership that you’re not making full use of, then it might be time to quit in favour of more affordable forms of exercise.
Investments
There are certain areas of spending that, in the long term, will actually improve your finances. You might look at preventative maintenance, on your home and your car. Shopping for replacement car tyres, for example, might limit your spending on fuel and maintenance. Look for local vendors. If you’re a motorist searching for car tyres in Plympton, say, you’ll find plenty of options.
Managing debt
If you owe money to many debtors, then it might make sense to consolidate that debt into a more affordable personal loan. Look at your options, and consider hidden costs. Try to avoid taking on more debt. Buy-now, pay-later deals often don’t charge you interest, but they do come with fees for late payments.
If you feel that you’re struggling with debt, then it might be time to seek the aid of an impartial third party. There are online services to consider, as well as debt advisers who will offer their assistance for free, without judgement.
