10 Hacks That Will Change Your Financial Situation
The phrase “personal finance” can send shivers down spines. The UK is below average at teaching financial literacy and the pressures of modern life make it hard to find the time to organise our finances.
Whether you’re in the red or black, it pays to learn more about managing your finances. Getting money smart could save you thousands in cash and even more in stress relief.
From getting ahead to planning ahead, good financial management doesn’t need to be time consuming. Here are 10 simple hacks for a smooth financial future.
1. Get interest savvy
This hack is worthwhile no matter what your financial situation is. If you use an overdraft, it is vital to get the best interest rates so you can minimise debts. If you’re a saver, you should also take a close look at the interest you’re earning to maximise your income.
If you do this well, you could make hundreds per year in additional interest. You could also use the savings loophole, transferring money between multiple current accounts to earn even more.
2. Plan smart for later life
When you’re young, the ageing process can seem a long way off. Growing older isn’t something we like to think about but if you’d like to mature in comfort, it is worth planning for retirement early. Use a pension calculator to find out where you stand.
If improving your children’s future forms part of your financial ambitions, it is also worth thinking about inheritance plans. Transferring your home ownership into a trust can protect you against fees associated with older age, so your children can benefit from everything you’ve worked hard for.
To maximise the helping hand you can give loved ones, consider making plans for a No Funeral Cremation. Your family can still arrange a memorial service but the process can be simplified to save thousands.
3. Create multiple income streams
Balancing your income and expenditure is at the heart of all personal finance management. Since most people have a fixed income, financial advice typically focuses on spending cuts.
However, if you’d rather not give up life’s finer things, it is also possible to focus on increasing your income. Setting up a business outside of your day job can provide a useful income supplement. As an added bonus, multiple income streams create security, shielding you from the negative effects of redundancy – should this happen.
4. Create a credit management plan
If you have multiple creditors, this will involve paying off your bad debt first, and finding the cheapest ways to manage your interest for smooth repayment.
If your finances are moderate to strong, focus on building a good credit score. Do this by paying for everyday costs with a credit card and keeping up with monthly repayments.
5. Set yourself a ‘happy spending’ allowance
When you’re trying to be economical, it is tempting to create an overly frugal budget, with no room for spending on things you love.
Not only is this strategy devoid of fun, it also increases the risk of failure and falling into the red. Set aside some ‘you’ money each month so it is easier to stay on track.
6. Cut unnecessary subscriptions
Most of us have regular subscriptions we rarely use and the monthly costs stack up. Every year, spring clean your direct debits and cancel anything you no longer need.
7. Use cash
One simple way to develop a better relationship with money is to use cash. If you withdraw a set amount each week, it can be easier to conceptualise the money you’re spending – and avoid nasty surprises in your bank balance.
8. Build an emergency fund
Every household should have an emergency fund to cover unexpected costs. This fund must be topped up regularly and should be enough to cover your basic living costs for around six months.
9. Embrace automation
The digital age is making everything simpler – and banking is no exception. It is now possible to automate aspects of your personal finance, for easier money management.
In a few easy steps, you can automate your savings and investments, so your money builds with minimal effort required.
10. Start investing
Investing is the simple way to grow your money, for a brighter future. Aside from traditional choices like shares, bonds and property, you can also start investing with small amounts.
The Finimize app empowers investors to make smart financial choices, so it is possible to get ahead – and stay there.