How To Be Smarter With Your Finances

AD| Hey lovelies, 2020 has been the year that I’ve got my finances in check there’s nothing like a global pandemic to teach you to get better financial habits. I’ve always been really awful with money, I’ve wrote about it multiple times on my blog but I ran up an incredible amount of debt on my postgraduate degree and I only finished paying it off this April/May. Since, I’ve done my best to be smarter with money and here’s the tips that have helped me the most!

Get Organised

When it comes to be smarter with money, getting organised is the first thing that I did. My relationship with money was awful, I’d go long periods without checking my bank balance and continue to frivolously spend and hope my card wouldn’t get declined. I never had any idea of my in-goings or out-goings and really left any form of money management to pure chance.

Understanding where my money was going, my outcomes and what I was left with allowed me to alleviate my debt. I then started to use the money I had left over to save following the 20/80 ratio. 20% went into my savings straight away and if anything was left from the 80% at the end of the month then it would also be added to my savings!

This taught me the important of financial management, because pre-hand I was just leaving it to chance, it allowed me to be smarter with my money.

Review Your Spending

Once you have you organised your money. It’s good to know where you money is actually going. Making a review of my purchases allowed me to see that I was spending ridiculous money on eating and drinking out per month. AKA around £120 a month on Starbucks and Nero’s coffee.

This means you can also set yourself small goals if you’re someone who maybe goal orientated like myself. I did this to make sure I wasn’t spending more than £30-40 on coffee and food which saved me quite a significant amount. It’s money I didn’t even realise I was spending.

I’d massively recommend looking at what short term, medium term and long term goals you’d like to achieve. Using SMART goals helped me a lot. You can read more about this in my Setting Financial Goals Post

Shop Smarter

When it comes to being savvy with your money, shopping around really can make a big difference. If you want to be smarter with money, why not save extra money where you can?? It can honestly be as easy as changing up a provider for your house to a cheaper provider or swapping your monthly Waitrose shop to more budget friendly Tesco shop.

You can still have the luxuries you love and shop around!

Look Into Income Protection Insurance

I understand that when people say insurance it can make your eyes roll. There are a lot of insurances out there, that quite simply you don’t need or are sold to you just to make an extra buck. When it comes to being smart financially you need to have a plan just incase.

I personally believe that Income Protection Insurance is one to look into. If you find yourself unable to work due to an illness or injury income protection can provide you 50-70% of your salary until you are fit enough to work again, reach retirement age or pass away during your claim period. It’s absolutely devastating to be out of work for any form of time, and an injury not allowing you to return to work can really turn your life upside down.

Income protection is also payed to you in monthly sums, making it easier to manage than one big payout. The cost of the insurance takes your personal variables into account like lifestyle, age, hobbies and health conditions. It also takes into account the deferral period you would like. To find more information do have a look at Income Protection Insurance.