Being financially responsible is essential, but it can be easier said than done. You know you have bills to pay every month but you also want to treat yourself and buy nice things. Having both isn’t as difficult as it might seem – simple changes to how you spend and save money will help you get there.
So, how can you adapt your lifestyle to become more financially responsible?
Tip #1: Learn to Budget
Having a monthly budget is one of the most important things you can have for financial responsibility. By having a physical budget, whether on paper or on Microsoft Excel for example, will let you see how much money you spend and where it goes. Be prepared to account for every expense, which can be tiring at first. You will, however, quickly get into the routine of jotting down every purchase you make.
Tip #2: Have a Savings Account
Every month, you need to set money aside in a different account to ensure you have an emergency fund for any unexpected expenses that you may incur. It’s easier to transfer money into your savings account as soon as you get paid and then budget for your expenses and bills. This will take away the issue of being left with very little to save at the end of the month.
You can save any way that is best for you; whether you want to invest in your pension, save up for a car, or simply save money, you can contribute a bit of money every month to achieve your goals. Try to save between 10% to 15% of your salary every month, adjusting the amount to your individual needs.
Tip #3: Avoid Getting into Debt
Avoid borrowing any money unnecessarily because it can become expensive very quickly. You’ll need to pay interest on the amount of money you borrow and, if you have poor credit, you are likely to have to spend more on a long-term period than you were expecting. Make sure you get professional financial advice before taking a step into asking for a loan that can potentially get you into debt.
Tip #4: Live Within Your Means
In this new age of consumerism, it can be easy to get disheartened if you notice your friends buying the things you’ve been eyeing for a while. However, it’s important to live within your means and not buy something you haven’t worked into your budget. Saving up for big purchases will make sure that you’re not out of pocket before your bills are due.
Tip #5: Set Financial Goals
Whether it’s a camera or a house that you want to buy, setting yourself a goal will let you be more responsible with saving. Plan to save, for example, £500 by the end of the year and you will find it much easier to slowly put money aside and meet the amount of money you need.
If you’re still unsure on how to manage your money and need you feel you could benefit from personal financial planning in Lancaster, here at Burton & Fisher we’re always happy to help. Simply get in touch with our team and we’ll help set you on the path to financial success!