This is a guest post from Jonny Pean of The Finance Wand. Please let me know if you would like to guest post on RFI!
It pays off quite well when you find time to manage your finances. It will ensure huge savings every year once you’re able to manage your bills more effectively. The more you save you’ll be in command of your finances. You’ll be able to invest the extra amount towards planning a vacation, buying a long cherished car or setting a portion of it towards your pension. You must acquire more knowledge on how to plan a budget, follow it and save more for your future.
How to go about setting a budget
Setting up a budget is like moving a step forward towards managing your finances. Although it might require you to put much effort, it will provide you with a vivid picture of how your funds are moving in and out.
You must work out on a few things in order to get started with your budget. Acquire as much information possible on your expenses and income by checking out your bank statements and bills. Keep such information for future references. You may choose to use a simple budget planner for summing up your monthly contributions towards buying gifts, making investments, travel costs, holiday expenses, cost of living and utility bills. Alternatively, you may even choose to make a note of all things in a piece of paper or save them in a spreadsheet.
Getting the budget back on track
Cutting back on your monthly expenses require you to pay much attention to the details of your financial situation. In order to understand your financial situation, you’ll need to analyze your true financial strength. In order to take sound budgeting decisions, you must achieve a vivid picture in front of you, and that includes your fund movements.
7 important steps that allow you to stick to a budget:
Rope in your loved ones:
Get all of your family members involved while arriving at a family budget. It’s very important for the household members to identify all of their potential income sources. All of you must follow the same budget plan; so you must be aware of the funds available and how much of it is allocated towards fixed expenses.
Cut back on your utility bills:
A huge chunk of our income goes towards meeting household bills. You may choose to compare new mortgages or new utility service providers and save a few thousand pounds. For this, you’ll need to do some research on the quality and efficiency of these services.
Get more flexible:
Life doesn’t seem to be predictable at all. Every individual needs to check his budgeting opportunities and save more if he finds a chance. Your utility bills seem to rise when you don’t get a pay hike. You must build strategies that help you acquire more control over your finances.
Pay off your dues:
Start paying your dues right now. This includes paying off your personal loans that come with a bit lower interest rates compared to your cards. Begin with the one that depicts the highest rate of interest. While paying off one card, you must continue to pay the monthly rollover charges. This is bound to improve your overall financial situation in the long run.
Set your savings goal:
You may check out your savings growth rate with the help of a savings calculator. The initial goal is to set aside a certain amount for emergencies. You may consider opening any instant access account that can provide you with funds in the event of a financial crisis. You must begin by saving an amount that helps in providing for the total household expenses worth 3 months. Thereafter, you may consider saving a certain amount every month for meeting your long-term goals.
Investing out of savings:
You may choose to invest your money in various financial products. In your attempt to do this, you must compare various investment plans offered by some leading banks or lending institutions and see which one will work in your best interest. Go through the terms and conditions before you sign up for a financial product. The clauses mentioning repayment and other obligations have to be considered more attentively as you’ll need to follow a payment plan that suits your budget.
Handle situations that may get you overwhelmed
There are times when you may find it tough to repay your dues. You must devise a payment strategy after considering your financial obligations for a month. It will certainly help you understand how much you can afford to repay every month. You must develop such payment strategies based on your current financial strength.
Remember that you will need to check your bank statements and payment demands that you’ve been ignoring all this while. Once you take the very first step, things will fall into place quite naturally. With every right step, you’re likely to brighten up your financial future.
Alexis says
I’ve been setting up weekly savings goals and keep track of my finances with Mint. The app is really helpful if you want to keep a close eye on a certain spending category, like coffee, which is a category I’m trying to eliminate.
Samantha says
It really pays to have goals or a list down the things you need to do in order to manage your finances efficiently. I agree with all of the tips here particularly number 1, 4 and 6. It’s best to get everyone in the loop so that everyone is on the same page and it’s easy to meet the budget. Regarding investments, make sure to determined your needs first then explore all available financial products well. Longevity is a pressing issue today that is answered best by the appropriate financial product be it a health insurance, long term care insurance or life insurance. Choose what you think will benefit you the most in the long run.
Stefan Ciancio says
Great article 🙂 Cutting down on household bills is for sure helpful. I know it helped me when working to get my finances under control. Another thing that helped me is selling stuff that was just sitting around on Ebay. Always brings in some spare cash 🙂 Thanks for this article!
Felynia Medina says
Thanks for sharing this great article with us. It makes such a great difference on how we make use of and view our finances. I extremely agree in that settling dues would make it a trouble-free start in freeing yourself from financial debt.
Umesh Gupta says
What a great post to cut the expenses and save money in order to meet my financial goals. I will surely follow these tips.
Redis Pellumbi says
Since we both use internet mos of the time I would love to cut my cable. Sadly though my brother doesn’t fell comfortable giving it up but it would be such a money saver if we did! Great Tips
Edwin | Cash The Checks says
I’ve recently completed a 30 day spending freeze and it really made me realize how messed up my “wants” and “needs” really were.
prem says
Thnaks I really like this post
Saurabh says
Very Much Thankful for sharing such concept on going finical issues .• Join hands with us on more free advice
Eric Van Haaften says
Twice monthly and quarterly I have automatic withdrawals from my checking to savings. I don’t even think about it. The money is gone and when I review my weekly standing against my budget that money is not considered, period.
When my savings account gets above a certain amount, I take balance and invest it into a higher earning account.
Marc obadia says
i agree with getting the loved ones to agree especially the kids as they always want to buy new things
Sandeep Kumar says
Very nice information thanks foe sharing..
Finance write for us says
Most of my family members are using the internet most of the time I would love to cut my cable. HOwever, though my brother doesn’t feel right giving it up it would be such a money saver if we did! Great Tips