Top Do’s And Don’ts For Your Finances

Manging personal finances isn’t something that comes naturally to everyone and can be quite tricky. However, we are on hand to help with our top do’s and don’ts to give you the boost you need to start saving. As direct lenders of short term loans, we have years of experience in helping and advising people with their personal finances, so take a look at our list and see where you can make improvements today.

1. Do Make A Budget

The first step to managing your personal finances is to make a budget. This doesn’t need to be super comprehensive and detailed, but it should cover all the essential bases. Take your monthly income into account, work out how much you spend on regular outgoings like bills, and any other costs that could be estimated, like grocery shopping. This should give you a rough idea of how much money you will have left at the end of the month.

1. Don’t Forget About Your Credit Score

In the world of finance, your credit score is everything. The better your rating is, the more likely you are to receive the best interest rates and offers. You can check your credit file for free through Equifax, Experian or TransUnion, and a good score is considered as 750 or above. If you find that your score is lower, there are ways to improve it, such as registering on the electoral roll, paying off existing debts, updating old addresses on bills, and keeping your credit utilisation low.

1. Do Build An Emergency Fund

Life can be unexpected and throw curveballs at the worst times, so having an emergency fund is key. It is a good idea to set aside some money each month to build up your emergency savings, otherwise you could find yourself in a difficult position in the future. Once you have your budget laid out, you will be able to clearly see how much money can be moved into your emergency fund and start making a habit of transferring it as soon as you are paid.

1. Don’t Make Rash Decisions

Many people struggle with impulse purchases and jumping into a rash decision, but reining this in can be really helpful. Every decision needs to be thought through and weighed up, so check your budget and decide whether or not you can afford the spend. One way to rationalise an impulse purchase is to think about how long you would need to work in order to afford it. You should especially try this technique if you are saving for a purpose, such as to purchase a new car.

1. Do Consider Automation

Automating your bill payments or transfers can be very beneficial for many reasons. The first is that it means you don’t have to remember to make the payment yourself, allowing you peace of mind and an easier way to build up your savings. You may also find that some bill providers offer better deals for those who pay via direct debt.

1. Don’t Forget Your Reasons For Saving

During the process of making your budget, write down why it is that you’re saving and making changes to your personal finances. You could even write down the concrete steps you need to take to get there, such as how much you would need to save per month to afford a mortgage. By keeping these in mind, you will be able to stay on the right track and hold yourself accountable.

If you need any more support with your personal finances, please seek impartial help from the Money Advice Service.