Estimated reading time: 7 mins
Managing money can be difficult, unless you’re a millionaire with tonnes of expendable cash chances are you’ve had to adopt at least some frugal practices into your life. Many of us feel the pinch before payday and at times like now right after Christmas, but while this is common amongst just about everyone there are some things you can do to make your life easier. A few simple changes can mean you free up extra money, stop wasting and spending on things you don’t need. Plus you could earn a little extra too which is never a bad thing. Doing a little advance planning can make such a difference, so if you’re bored with being broke- introduce a little method to your money planning! Here’s how you can go about it.
Create (and Stick to!) a Budget
One of the most important things when it comes to your finances is creating a budget, and sticking to it. You need to know what money you have coming in each month, and what goes out. You need to know when your bills are due, ideally you will have a separate bank account for direct debit and bill transactions so you never accidently spend the money put aside for them. Your rent, utilities, travel and other priority costs should be organised first, and then you can see what expendable income is left. If you budget carefully for each area, you’re left with more money which could be saved, used towards debt or used elsewhere instead of just being wasted.
Once you have your budget in place, it’s easy to see where you’re overspending and where you can make cutbacks. Are you wasting a lot of money on things like convenience foods, pre packaged sandwiches for lunch, coffee from a coffee shop every morning and takeaways and meals out at night? Do you spend money on clothes you never wear, online services that you don’t use much? Cutting out things like Netflix, Amazon Prime Spotify. Xbox Gold and other things like this could free up a heap of money and is worth doing if you’re not using them as much as you should. One way most households can save money is by being more savvy with their groceries. Experiment with supermarket brands instead of big brands, you might not like everything but switching a number of items can massively bring down your spending. Many of these products are made in the same factories with almost identical ingredients so don’t turn your nose up- try and see! Another way is to write out a meal plan, that way you can buy exactly what you need and aren’t spending excessively on luxury items or things that will get wasted. Once you have your meal plan sorted, create a shopping list and stick to it. That way you’re not being tempted by things you don’t need. It’s also worth stocking up your pantry with long life items that can be used to create meals if you run out of food before your next shop. Pasta, rice, grains, sauces, herbs, spices and tinned vegetables will allow you to put together a tasty meal in a pinch so you don’t have to resort to an expensive and unhealthy takeaway. Getting organised with your food really can save a lot of money, so if you want to make cutbacks this is one area to address. Your bank balance will thank you for it, your waistline probably will too!
Get Out of Debt
Being in debt is expensive. Every month you carry a balance on a loan, credit card or store card you’re paying interest. Over the course of the year you would be stunned what this can add up to. If you want to save yourself money, getting out of debt is a smart move. One option would be to use savings to pay down balances. You might feel like you need savings in case you need instant access to cash- but having savings while you’re in debt is the wrong way around things. You will save yourself money if you use what you have to bring down balances as much as possible. Ideally you will pay off your debts completely and close your accounts, but even paying as much as possible will reduce the interest you’re being charged each month. Another option would be to take out a debt consolidation card or loan, and use this to pay off all of your other accounts. Instead of paying lots of different amounts of interest each month you only pay one. Plus, many have an introductory period where you’re not charged interest, giving you a few months to bring down the balance as much as possible.
Sell What You No Longer Need
The average household is sitting on hundreds, sometimes even thousands in unwanted items. Instead of letting them gather dust, why not sell what you no longer need? This is money that could be used to pay down debt, add to a savings account or generally use to make life easier. Everything from broken jewellery to out of date phones and computers, clothes and bric a brac can all earn you some cash. Check out sites that buy items online, list on eBay, Craigslist and Facebook marketplace. You could also hold yard sales or attend a boot sale. Scour your attic for things like antiques, you might have something that’s no use to you but someone else is prepared to pay a lot of money for.
Earn a Promotion or Change Career
As well as making cutbacks and making the most of the money you have, if you’re struggling it’s a good idea to earn more cash. One way you could go about this is by asking for a raise. If you genuinely feel you’ve earned it, it doesn’t hurt to approach your boss about it- just make sure you go about it in the right way. If your current career doesn’t offer any progression, how about making a change? You might have to take a drop in salary initially, but over time you can work your way up and set yourself up for a brighter financial future. You may have to take on some voluntary work, training or education to get to where you need to be- for example if you want to go into msn education jobs you’d need to study a nursing education program. If you want to go into counselling, you could advance your psychology degree with a masters in counselling psychology. Have a think about your goal and what you need to do to get there. A drop in money now could mean much better wages later down the line so would be worth doing.
Start a Side Hustle
If getting a promotion or switching careers isn’t an option, there are other ways you can earn money. You could work from home as a blogger or freelancer, or you could set up your own small business. The good thing about these things is that they’re flexible. You choose your hours and how much work you take on, meaning you can fit them around your regular working hours. If you’re having an expensive month you could put in some extra hours from home during the evenings and weekends, or if it’s all getting a bit much you could take a break without having to get the go-ahead from a boss. You’re your own boss in this case so can take control and do as much or little as you like. If all goes well, it could even become your full time job one day.
Make Smart Investments
If you have money sat in the bank, instead of letting it accumulate a small amount of interest why not put it to better use? While some investments can be risky (think volatile markets like the stock market or Bitcoin) others such as property are fairly stable. One example would be to purchase a property, and then either do it up and flip it, selling for a profit or renting it out. If you have inheritance money, a nest egg or just money you have saved, it’s a good way to turn a little money into a lot more. Seek professional advice and do your research if you’re new to investing since there will be risks with anything you put money into. But it could be an excellent way to earn some passive income, and have money land in your account each month with very little effort from you.
If this year is your year to get organised with money, have a think about where you’re currently going wrong and take steps to put this right. You would be surprised how small changes can make a huge difference, and allow you to get ahead or at least not feel the pinch quite so much.
What are your new year’s finance resolutions? Will you be putting any of these ideas into action?