Let’s face it, we all want to be financially stable, and the sooner we can do it the better. After all, it is never too early to get your finances in order for the future – you will thank yourself later! You may have picked up bad spending habits or have accrued debt, but once you acknowledge it you can get it sorted. As long as you are aware of the issues you can commit to putting them right and rectify old habits to stop them from happening again. Here are five simple ways to put yourself in the best financial position for the future…
Set a budget for yourself and stick to it – The first bit to getting your finances on track is always the hardest, so start by putting together a spreadsheet of all your finances. This should include the amounts you have in any accounts, any debts you have, and any money that you are waiting to come in. Figure out if your financial position is getting worse or better and why it may be. Make note of regular bills and expenses as well as keeping in mind any holidays, birthdays, or calendar events that could be costly. Set yourself a budget of what you can afford each month for things such as bills, food, and leisure and you will get a good idea of how much disposable income you are left with.
Get a plan for paying off debt and see where you can save costs – If you have debt such as credit cards, finance accounts, and overdrafts, it’s best to get these paid off as quickly as possible. These sorts of debts usually involve large interest payments that could see you paying off the tiniest amount of the actual total each month and leaving you with repayments that last for months or even years. If you have money in savings, figure out how much you can take out and pay as much off of these accounts as you can. Set up a direct debit every month to clear these – just ensure you don’t overstretch yourself.
Ensure you have cover in place for emergencies – Accidents and emergencies happen so it is important you always have an emergency fund available for any incidentals that might happen, as well as covering yourself with insurance. If you have children or a mortgage it is important to consider taking out life insurance to ensure protection. Contents insurance is also very important as if something were to happen to your home such as a fire or flood, you don’t want to have to fork out thousands to replace your possessions. By having an emergency fund, you can pay if your boiler or cooker breaks without having to stress or spend on a credit card to cover the unexpected expenditure.
Prepare for your retirement – While retirement might feel like a long time away for some, it is never too early to start planning for it. Look into what is a Checkbook ira for a great way to save retirement funds, or many other investment opportunities. You could also speak to your employer about their pension scheme and start your own side pot to add money to every month that you won’t touch until you retire. There are many dedicated bank accounts you can utilize to save for your retirement that can accrue interest over the years. Look around and find the one with the best rates before you make your final decision.
Find a bank account with the best interest rates – There are so many banks out there, all with different accounts and benefits. You could be tempted to just stick with the bank account you have always been with, but don’t be afraid to open a new account and explore other options. Many bank accounts have benefits such as travel insurance as well as different interest rates that can top your funds up each month. If you don’t need your money for a while, then it’s a good idea to use a regular savings accounts where you can earn up to 5% interest once the year is up. If you need the money after twelve months you can do so, otherwise you can transfer it to a regular savings account.
There is no better feeling than being financially stable, so it is important to get yourself in that position as soon as you can. By implementing the above simple tips, you will soon find yourself less stressed about money and ready should any financial emergencies happen.