5 Tips to manage your money better
With the economy always changing money management is essential, in fact it is more important than ever. Especially being a contractor sometimes finding yourself between contracts for a few months, or if you want to take a well-deserved break. Being able to save money is a valuable skill to have and is especially useful to deal with changes in personal circumstances or challenging economic times should they arise.
Outlined below are some tips that will ensure you will be able to manage your money better.
#1 Getting Your Budget Right
I am sure you have heard this saying before: ‘Those who fail to plan, plan to fail’. Budgeting is your first point of call on the road to better money management.
Creating a budget allows you to live within your means; not everyone is keen on budget setting as they feel it limits them substantially; however, when done correctly it is definitely a positive start.
Step 1 Record your income and expenses for a month.
Step 2 Stick to your regular spending habits to ensure most accurate forecast.
Step 3 Use the information you acquire from this task to form the basis of your budget plan, this will give you an idea of the expenses you could do without.
Now that you have a list of your incomings and outgoings, you can pin point exactly where your money is going and look at ways to reduce your expenses where possible. Bills can pile up quite quickly and before you know it, you’ve already gone through most of your income. By managing your bills, you can start spending your money more wisely.
Looking at bills is an essential part of money management. It can provide you with insight into the services you are paying for. If you believe you could save some money by getting a better deal, your bills will be the best starting point.
#3 Focus on reducing your Debts
Easier said than done, eh? Try and take care of any existing debt as quickly as possible; debt can have a devastating impact on your money management, the sooner its gone the better – good riddens.
Before you create your debt recovery plan, you need to take a look at all the debt you currently have. Find out how much you need to repay monthly and how much income you have coming in. A big tip is to minimise the use of your credit card and always pay debt off quickly so you avoid paying too much interest.
#4 Keep it Real… Be Realistic about Money
Some people find it difficult to live within their budget, possibly due to a credit card debt or another repayment that is affecting their living expenses. If this is the case, there are other options available and you can always seek expert advice if you are having difficulty sticking to your budget.
When you implement your budget plan, it is very important to be realistic and don’t set goals that aren’t achievable.
#5 Emergency Fund – Save for a Rainy Day
Saving is key, invest in your future, you want to be financially secure, just a little recap: set a budget, reduce your debts and spend wisely and saving will become a lot easier.
Saving for the future is one reason why people decide to implement a money management plan; however, you can also implement a money management plan for a specific goal. For instance, you may be saving for a deposit on a new home or you may want to buy a new car.
At SDP Solutions we continuously seek to improve our services to contractors, as we exist to make contractors happy. We have been busy working on new initiatives that will be introduced in the next few weeks to extend our services to current and potential contractors including wealth management services and products along with some other fantastic offers and ways for you to earn extra money.
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