There’s nothing worse than worrying about money. Even if you’re not in debt or struggling, you need to be proactive to keep things running smoothly. Unfortunately we will always have bills to pay. And not paying them can have serious repercussions. So it’s worth setting things up so that everything is always paid on time and without hassle to you, so that you can use your mental energy on other things
Track Your Expenses
The first step in simplifying your finances is to gain a clear understanding of where your money is going. Start by tracking your expenses for at least a month. This can be as simple as jotting down your purchases in a notebook or using a budgeting app. By doing this, you’ll be able to identify any unnecessary or impulsive spending habits that might be draining your bank account. Once you have a comprehensive picture of your expenses, you can make informed decisions about where to cut back and save. Set a limit for luxuries so you’re not going over the top. And work on reducing what you spend on things like bills. Investing in a water butt to save water that can be used on your garden, or solar panels to save money on electricity are both options- companies like All Seasons Energy have more information on this. Knowing what you’re spending allows you to make cutbacks where needed. And give you control of your finances.
If you have multiple bank accounts, store cards, credit cards and everything else then managing them can be difficult to keep up with. You might end up accidentally missing payments or paying lots of different interest rates. If you consolidate all of your debt into one account it can give you a better interest rate and just generally a clearer view of your finances. Research a loan or credit card that gives you a good deal, then transfer all of the balances. Close all of the other accounts and you now only have one payment to make each month rather than lots of them. You can reduce the mental load of remembering due dates and avoid late fees too.
Build an Emergency Fund
Life is full of surprises, not all of them good. From losing a job to cost of living increases, emergencies that can require cash. Having a safety net in place can give you some much needed peace of mind. Aim to save at least three to six months worth of living expenses by taking a small amount out of your wages each month. Without a safety net, if you’re in need of money you will be forced to take out loans and credit cards. And potentially pay high levels of interest or spiral out of control with money. This can make what is already a stressful situation so much worse, so always plan ahead and save what you can.