Are you constantly left with a suffering bank account by the end of the month? Or are you hoping to meet certain financial goals but don’t have the means to do so? It can be tough managing your money, and it’s so easy to splurge on accidental impulse buys or lose track of your monthly outgoings. If you want to learn how to be better with your money, take a look at these top tips.
There are no two ways about it. If you want to be smarter with your money, you need to start saving. Saving money aside in a separate bank account each month will help you get to grips with your finances and generate a rainy-day fund. A rainy-day fund is a sum of money that can be used in emergency situations when you need a bit of financial help. Whether you unexpectedly lose your job or need to pay for a costly maintenance repair, it’s always a good idea to keep some savings aside. This should ideally contain enough money to cover at least three months of bills and other essential outgoings, which is why it’s so important to start saving as soon as you can.
Budgeting is a great way to monitor your monthly income and make sure you don’t spend your money too quickly. This involves taking some time to create a plan each month on what you’re going to do with your money. One of the easiest and most effective budgeting methods is the 50/30/20 method. With this, you split your monthly income into three categories — your ‘needs’, your ‘wants’, and your savings. ‘Needs’ comes under things like rent, energy, water, food, transport and other essential bills and costs, which should go towards 50 per cent of your overall monthly income. Then, ‘wants’ is 30 per cent of your monthly income set aside for treats, splurges and social spending. 20 per cent of your income then goes on your savings. This might leave you with less expendable income than you’d like, but if so, it’s a good opportunity to look at ways you can cut your spending. Whether that’s making your own coffee rather than buying takeout, or shopping in a cheaper supermarket than usual, there are plenty of ways to cut your costs for better money management.
One of the best ways to boost your finances so that you have more money to spend or save each month is by investing. There is a range of investment types you could go for, but property investment remains one of the most popular and often the most lucrative option. Of course, this can depend on the area you invest in and the type of investment you choose. Companies like RW Invest offer property investment opportunities in prime UK areas like Liverpool and Manchester, with high rental returns of up to 7 or 8 per cent. Investing in buy to let property in these cities gives the chance to earn rental income each month, but also generate a large return on your investment when you decide to sell thanks to high property price growth. If you do decide to invest, make sure you’re in a good place financially to do so, and fully research all aspects of the investment process.