Even as a responsible adult, managing money isn’t always the easiest. While some people might have the same amount of incoming money and outgoings every month, that’s not the case for everyone especially if you’re self employed (or for a million other reasons). It might just be the case that over time, things have been added into your budget and things have become a mess, so every now and again it’s worth sitting down and getting things back in order. You really do get the most out of your money that way, you’re not forgetting about things and falling behind or wasting money on subscriptions and other things you dont use. Here are some ideas.
Getting Your Debt Back Under Control
When you start sorting out your finances, getting any debt that you have under control really does need to come first. Being in debt is both stressful and expensive, so it’s important to do what you can to get it to a manageable level. In some cases, selling items you don’t need, tightening the belt on luxuries and picking up extra shifts at work for a few months can be enough to pay down balances. But what if you’ve already tried all of that and it’s still not enough? In that case you’ll probably need to speak to a debt management company or a charity who can give you advice based on what you owe and what you earn. They’ll usually look at the full picture rather than just one account (which can feel like a relief if you’ve been burying your head in the sand about if for a while). They can give you IVA help or advice on bankruptcy, or you might be able to start an informal debt management plan. Here the interest on all of your debts is reduced or frozen, and your payments are reduced so they’re at a manageable level. Once you can regain control of what you owe and aren’t dealing with spiraling interest payments or ‘robbing Peter to pay Paul’ every month, everything else about your finances can improve.
Start Saving When It Makes Sense
Saving money while you’re still in debt rarely makes sense, and that’s because the interest you’re being charged usually outweighs anything you could earn by putting money away. But once all of your accounts are paid and closed, you’re in position to start putting money away and it’s well worth doing so. As well as putting money away for shorter term things and luxuries like holidays etc, put money into long term savings that are only touched in an emergency. Make sure you’re contributing enough towards a pension so you’re preparing yourself for the future as well.
Start More Income Streams
You can give yourself more financial security by creating additional streams of income alongside what you already earn. Even if your regular job seems pretty secure, no one knows if the company will go bust, or if they’ll get unwell and not be able to work or any series of events leading up to a job loss. The best thing you can do is turn a hobby into something you can earn from as then it’s fun and doesnt feel like a chore. Start teaching or tutoring in something that you love, start and monetise a blog or something like an ebook. Start an Etsy business or a reselling business, there are tons of options that can work along what you already do.
Getting Insured
Finally, getting the right insurance can protect you from all kinds of financial shocks that would otherwise be hard to absorb if you had to pay out of pocket. Insurances can protect you from financial harm, if the worst happens. If you own your home then buildings insurance is a must, and everyone should have contents insurance to protect the things that they own from theft and or damage. This is especially important if replacing items would be difficult on your current budget. You can even take out specific appliance or boiler insurance, as well as things like pet insurance. Consider what you might need in an emergency and consider taking out some policies.
