How to Make the Best of Your Salary

When we get paid, it can often seem like the money just disappears and we hardly know what it is spent on. It can feel like we get no enjoyment out of the money because it is all gone on bills and things and we may even have to borrow some at the end of the month as there is not enough left. However, there are things that we can do to make it easier to see where the money is going and perhaps so that we can have some left at the end of the month as well to spend on fun things.

  • Keep a track of your bank balance – it is wise to regularly monitor your bank balance. Sometimes it can seem like there is suddenly no money in the account, but unless we carefully track it and look into whether money is there, then we can easily go overdrawn or get into financial difficulties. It can be wise to take a look at it every week or even more often to see what your balance is. Perhaps when you are at an ATM check the balance, but it could be better to keep a check on it online as you will be able to see what transactions are happening and when, so you can see when money might be due to go out. If you have direct debits and standing orders, it can be wise to get them all to leave the account just after you get paid. This not only means that you are more likely to have the money available to pay them but also you will know how much you have left to spend on other things.
  • Check you are not overpaying for things – it is wise to take a look at the things that you are buying and make sure that you are not paying more than necessary. Often, the things that we buy are available from multiple places. This means that you will be wise to compare those different places and see whether you can find the items cheaper elsewhere. It might be that you can switch suppliers or retailers and save a significant amount of money. It can be much easier than many people think to switch and therefore it is well worth looking into. You could save money on a selection of things from insurance to electricity and all of those savings could add up to a significant amount.
  • Ensure your tax code is correct – some people are paying more tax than necessary. It is worth making sure that your tax code is correct by checking with inland revenue. Many people assume that it is up to their employer to check that this is correct, but it is not their responsibility. It is simple enough to contact the inland revenue and just check the details with them. You may even be due a tax refund if the code is incorrect.
  • Pay off your debts – if you have a lot of debt then this could be contributing to you having a lack of funds. This might seem odd as you may feel that the debt will actually allow you to have extra money. Of course, when you borrow money you do have access to more. However, you have to pay interest on the money that you have borrowed. This will mean that you will be paying some out each month for that. If you have a loan, even with no credit check, mortgage, credit card and overdraft, this could add up to a significant chunk of money. In the short term, doing nothing will be cheaper, but in the long term it can make sense to repay some of the debt and then you will be paying out less in interest and you will have more money available to spend on other things as a result.
  • Monitor your purchases – it is worth making a careful note of what you are buying with your salary. This is wise because then you will know exactly where your money is going. This will allow you to be able to monitor things and make sure that you are spending your money on things that you really want. Obviously, you will need to buy necessities such as rent or mortgage, tax, water and electricity but there are many things that we buy that are not necessary and we need to make sure that we prioritise these so that we only buy the things that we really need.

Hopefully, if you try these things you will find that your salary will go further. This will mean that you will be able to enjoy it more and it will not just seem to disappear before you know it. It will mean that you will have to do a few things to make sure that you are not overspending but that will be worth it if you feel more in control and have more fun with your money.  

How to set a New Year Budget

Often when it is the new year, we will have resolutions and these could be financial. However, many of us will not be too sure about how to set a budget. We might want to pay off some loans, save more money or something like that, but if we just decide that, it may not be enough. It can be much better to actually come up with a plan that you can follow so that you can easily stick to it.

  • Assess your current situation – it is important to start by looking at your current financial situation. You need to have a good idea as to what is going on with regards to how much money you have coming in and how much is being paid out in a normal month. Look back over past bank statements and this will allow you to take a look and see what is going on. You will be able to see how much you normally get coming in, money wise and how much you pay out. This will allow you to see whether you normally have money left over each month or whether you spend more than you earn. You probably know this anyway based on whether you have an overdraft or not.

However, it is worth going into things further. Write out in detail exactly where your money is spent. This allows you to see what is spent on essential items and what is spent on luxury items. If you need to reduce your spending, then you will need to pick form those luxury items to cut down. Be honest with yourself when doing this. You may not want to cut back in certain areas and just because you might need to cut back, it does not mean that you have to cut back everything that you like. It is more about prioritising your spending. You might even find that you are paying for things that you do not really want anymore, perhaps subscriptions you had forgotten about or things like that. It might be that you will be able to cut back in areas that you do not really mind cutting back in or that you will be able to earn more and not cut back at all.

  • Set your goal – once you have an idea of what is going on with your finances you will be in a better position to think about what your goal is with regards to improving your financial position. It might be that you want to save a certain amount each month, pay off a certain debt or stick to a spending budget. Once you know where you stand financially, you will be able to set that goal and work on how you will get there.
  • Set down specifics – just having a goal such as repay loan or save more will not really be that useful. If you set a specific goal then you will be able to focus far more easily. So, think about what you want to achieve and how. For example, perhaps you want to clear your overdraft in a year. You will have to think about how much there is to clear and how much you will have to repay each month in order to clear it. Then you can think about whether you will be able to easily afford to do this or whether you need to try to spend less or earn more to do it. Having looked into your financial situation you will know this and therefore be able to make plans. It is worth doing the maths and working out specifically what you will have to cut out in order to free up the money or whether you will need to earn more money in order to achieve what you want.
  • Keep motivated – keeping on track can be one of the most difficult things when you set up a new year goal or a financial goal. Until you are in a new spending habit it can be hard to keep going with it and it can sometimes feel like you are depriving yourself of the things that you really enjoy. However, if you write down what you are trying to achieve from your spending and the reasons why, then this should help. For example, you might want to put that you want to save £100 a month to save up for a deposit on a home or that you want to repay £50 a month on your overdraft so that you can clear it in a year. By having this written down and somewhere where you can regularly see it, you will be able to keep reminding yourself of why you are working so hard and what your reward will be at the end of it.
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