Saving more money in 2019 is probably one of the more common new year’s resolutions. It’s something many of us set out to achieve each year but can often prove to be one of the most difficult resolutions to keep.
How to Manage Your Money
We understand that managing your money isn’t the most interesting way to spend your day, but it is vital for long-term financial health. Staying on top of your spending can lessen the chance of falling into dangerous levels of debt. We’ve looked at a few small steps you can take to help get your finances into a healthy state in 2019.
The 50/30/20 Rule
The 50/30/20 rule splits outgoings into different priorities: ‘needs’, ‘wants’, ‘savings’. While we all earn different amounts and our outgoings vary, this rule could still be adapted to suit your situation.
Most importantly, before you start make sure you know exactly what goes in and out each month. If you have online banking, you should be able to get this information without going through a lot of statements.
Our ‘needs’ are the most important category. This section is compiled of all absolutely necessary spending. This includes all housing costs, utilities and food shopping for the month. It should also take into account extra monthly outgoings such as phone bills and any credit card or loan repayments required that month.
The next section focuses on our ‘wants’. This section comprises of things we want but don’t necessarily need which include extra spending such as shopping and hobbies. Consider using a calendar so you know when you have big events coming up such as birthday dinners so you can put money aside to make the most of it.
Savings are the key area which can differ from person to person. Take some time to work out what you can put aside each month after your necessary expenditures. Savings are often used to contribute towards a new home or car and can come in useful for emergencies. Savings can also be used to repay any outstanding debts.
There are a number of tactics you can utilise to stay on top of things. Consider making a schedule so you are aware which costs come out when. You can also use your schedule to create a bit of routine such as doing your food shopping on the same day each week, so you know how much you have remaining for the rest of the week.
Budgeting your money can be a tricky art to perfect. We are all very different in terms of income and out goings, but regardless of how much we may earn, the importance of financial planning is the same. 2019 could be the year you become a money saving expert!
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