Best Practices For Money Management

Have you struggled with debt in the past, or are you more relaxed than you should be when it comes to controlling the purse strings?

Are you looking for ways to put more money aside, or do you long for more disposable income?

If you’re eager to get a grip on your finances and improve your situation, you’ve come to the right place! Here are some best practices you can use to improve your personal finances.

What About Debt?

It’s not uncommon to be in debt, but this doesn’t offer much reassurance if you’re struggling to pay bills or wondering how you’re going to make it through to payday.

The first step to improving your financial situation is facing up to debt. There are different types of debt, and often, if you owe money, this isn’t the end of the world. If you have a mortgage or a loan, for example, and you’re paying it off just fine, there’s nothing to worry about. Keep up with the repayment schedule, and you’ll find that your credit score will actually improve.

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Problems arise, however, when you can’t afford to clear debts, and you start to fall behind. If you’ve got final demands sailing through the mailbox, or you’re paying for everything on a credit rather than a debit card, you may find that your debts spiral out of control. If you’re in this situation, the first step is to admit that you have don’t a grip on your finances anymore.

The sooner you can do this, the better. The next step is to seek advice so that you understand what kinds of options are open to you, and you can start prioritizing debts.

Your Lifestyle

In this day and age, it’s very easy to spend more than you earn. Many adults rely on credit to get from one payday to the next. When you have cards in your purse or wallet, you can shop anywhere at any time, and you’re bombarded by special offers and discounts throughout the day, it can be very difficult to live within your means.

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If you are guilty of overspending, it’s beneficial to adopt a budgeting strategy. If you don’t already make a budget at the start of every month, now is the time to start. Your budget will provide you with information about how much you earn and how much you spend.

If you stick to a budget, this will decrease your risk of overspending, reduce the risk of taking on more debt, and help you to identify areas where you could potentially save. There are templates you can use online, you can download apps, or you can stick to old-fashioned pen and paper and arm yourself with a calculator.

How to Borrow

There comes a time when many of us consider the option of borrowing money. If you need to repair your car, you’re hoping to make some home improvements, you may be exploring your options.

If you do want to take out a loan from a company like Bonsai Finance, it’s crucial to conduct thorough research, compare offers, and make sure you can afford the repayments before you sign on the dotted line. When you have an offer in front of you, check your budget, and then make a decision. If you’re already in debt, or you’re struggling to scrape by, it’s wise to avoid borrowing more money.

Do You Save?

If you’re keen to increase your bank balance, there are ways to do this without taking on an extra job or making dramatic sacrifices. Often, it’s possible to widen the gap between your income and your spending by changing the way you shop and ensuring you get more for your money.

Take the example of insurance. How many policies do you currently have? If you own or rent a property, you might have home or contents insurance or both. If you drive, you probably have car insurance, and if you have a pet, you might also have cover for vet fees. Other popular products include health and dental insurance, and life insurance.

If you have multiple policies, you may well spend a substantial amount of money on insurance every month. When was the last time you shopped around or switched provider? If you’ve been with the same company for years, you could be paying a lot more without even realizing it.

Next time your policies are due for renewal, use online comparison sites to see what other offers are out there. You may be surprised at how much you could save. It’s also worth comparing prices on TV, broadband and mobile phone contracts, and your utilities. If you learn to look for the best deal, this will benefit your balance for years to come.

You can also enjoy savings on household items such as pet food, clothing, and shoes by shopping around for the lowest prices and using discount codes and vouchers.

Take Action

Would you like to have more disposable income, or are you tired of worrying about money? If your bank balance is a cause for concern, there are ways you can improve your financial situation. Start by addressing debt, and don’t be afraid to seek expert help if you feel like you’ve lost control. Learn to budget, try and live within your means, and take great care when borrowing money.

You can also increase your bank balance by getting more for your money. Shop around for the best offers, look for lower prices, and take advantage of Internet sites that enable you to compare prices. If you can get a grip on spending and lower your outflows at the same time, you’ll improve your personal finances.

This post is for educational purposes only.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl

 

Image: Bullseye, Jeff Turner CC by 2.