Overhaul your finances in 5 easy steps…
Gaining control of your money and managing finances is something that a lot of women often defer or leave to someone else, and as 1.5 million British women lose sleep over money worries every night, the need to finally get some clarity which will allow you to make steps forward should be a high priority. In this post, we will be sharing 5 steps that you can take to get on top of your money, and finally put those money gremlins to bed…
1 SET MONEY GOALS
The first and most important task to getting control of your finances is thinking about what you are doing it all for! Establishing short and long term financial goals can not only give you focus, it can help you when you are deliberating on purchase decisions. A good way to set money goals is to put them into categories – such as Home, Career and Personal Development, Travel and Health. Make sure you include small goals as well as the bigger ones, so that you can celebrate often when you achieve them, and it will help to manage those feelings of disappointment when you have to sacrifice things for the bigger picture!
2 MAP OUT YOUR MONEY
One of the most common ways of dealing with money is the “shove it away for a rainy day” technique. It can be really painful to look at bank balances, credit card bills and loan statements. However, sitting down and actually understanding all of your outgoings is not only essential if you are going to take control of your finances, it can be a really liberating experience.
It can be a tough plaster to rip off, but once you have a full awareness of your financial situation you can then start to formulate a plan that will enable you to achieve those money goals. Maybe the first money goal should be map out your money!
3 LETS TALK ABOUT DEBT.
The dirty D word. The stigma attached with debt is one of the main causes of worry in women, and breaking the stigma is one of the most important steps to getting in control of your money and finances. By mapping out all of your money and being clear on your money goals, you can find tackling your debt an easier pill to swallow and start taking action on.
Taking action is obviously easier said than done, but there are steps you can take to get on top of debt, and even really small steps can add up to a massive difference. Things to think about – transferring card balances to a 0% offer, looking at small overpayments (even an overpayment of just £5 per month can take months or even years off of a repayment on a card or loan) and consolidating balances so you have one monthly payment. It is best to get advice from a financial advisor before you look at taking any new credit so that you know you can afford it and that it’s the best deal for you.
4 PUT YOUR SPENDING HABITS THROUGH THE WASH
This is one of the toughest activities but it an make a huge difference. Get out your bank statement that covers three months and literally line by line look at all of the non-essential spending. Put it through the life washing machine – what does it do for you? Can you do without it? What would you lose if you didn’t spend that as often as you do? This is not an exercise of removing all joy from your life, but it is an opportunity to really consider what you can sacrifice to be able to achieve those medium and long term financial goals. Think also about how you can get more savvy with your money – with discounts, vouchers and payment plans – they can help you save on things you need and want, making your money go further.
5 LOOK AT THE LONG TERM…
If your company has a pension scheme it’s a no-brainer to be enrolled. The total minimum contribution increased last April to 8%, with a minimum employer contribution of 3%. Could you be putting in more this year? Getting advice on your pension, and other long term finances is an important element to overhauling your finances. How do you want to live when you are in retirement? Think about those money goals – when do you want to retire? Looking at savings and investments as well as your pension doesn’t have to be scary or intimidating. Look for pragmatic and honest advisors who will support you without judgement.
These five activities have the power to literally overhaul your finances, and most importantly give you a more positive money mindset. We all want the comfort of knowing we can afford what we have now, as well as being able to look to the future. Are you ready to overhaul your finances and finally get some control?