How To Take Control of Your Personal Finances

Do you feel as though your money is causing you more problems than it’s solving?

Personal finance can be a major source of stress for many workers in the UK. Recent polling has revealed that it’s a source of anxiety for around a third of people in the UK.

Taking money seriously, and developing the skills and knowledge needed to handle it well, can make a big difference to your future prosperity. Let’s take a look at a few important steps toward a more secure, stress-free financial future.

Create a Comprehensive Budget

To begin with, you’ll need the right budget. This should set out all of your sources of income and expenditure. Make sure that you break the latter down into non-essential spending and essential spending. Once you’ve done this, you might immediately be able to spot where the potential for savings lies.

Build an Emergency Fund

When you don’t have a reserve of cash available to help you deal with unexpected medical bills, appliance repair, and other emergencies, it’s easy to feel a constant low-lying stress. You might always be thinking about what might happen in the event of a disaster.

By building up a reserve of cash for emergencies, you can keep these feelings at bay. Keep a few months' worth of spending in a readily accessible place, so you can easily access the cash when and if you need it. Then invest the rest somewhere where it will earn you a return.

Manage and Reduce Debt

If your debts are demanding a sufficiently high level of interest, then there’s no point in saving money: you’ll want to instead pay off the debt. Credit card debts and payday loans should be prioritised. Make sure that you make the minimum payment on all your debts, and put as much spare cash as you can into the high-interest ones. If you have many loans, it might be worth considering debt consolidation or renegotiating your debts. It’s often in the interest of your creditors to do this: after all, it’s in their interest to help you pay back the debt.

Engaging with reputable financial advisers can often help you to drive down your debts more quickly, and to identify exactly what the best approach is.

Plan for the Future

It might be that you have particular financial goals that you’d like to meet over the long term. You might want to buy your own home or save for retirement. You should build your savings plan around this ambition. If you need access to the money in five years’ time, then locking it away won’t make sense. You can often find savings and investment products that are geared specifically toward things like retirement. Make sure that you make the most of them!