Manage Your Personal Finances More Efficiently With These Five Simple Rules

So you’ve decided to take your head of the sand and take control of your money, here are five simple rules to help you on your way.

1. Stick to a Budget

A budget is the best way to manage how you spend your money. Before you can start to plan a budget, you will need to recognize what your main expenses are. Keep track of all your expenses, however small, for a month. You will then be able to recognize where you spend your money and what can be cut back on. Keeping to your budget can be difficult so make sure you allow yourself to have one fun expense per month, such as going to the cinema, so that you don’t crack.

2. Make the Most of your Groceries

A detailed meal plan is an ideal way to curb excessive spending on groceries. With the increase in food prices, managing your weekly supermarket spend is well advised. Make a thorough list and don’t stray from it. Offers are always appealing but you will end up spending money on items you don’t need. Join the supermarket loyalty schemes, especially if you buy petrol, as they offer rewards for loyal customers. Another way to take advantage of your supermarket shop is to start making a packed lunch to take to work. Making lunch at home costs a fraction of the price of the shop bought equivalent and could save you up to £100 per month!

3. Be Clever with your Credit Cards

The trick to credit cards is to treat them how you treat your debit card. Spend only what you can afford to pay off easily. Also being faithful to one credit card company is a bad idea! New customers get the best rates so it is worth checking other credit card deals and changing your credit card every year if possible. Credit cards are the perfect way to build up your credit rating but not a license to spend the whole limit of the card. Stick to using your credit card for fuel, groceries and bills.

4. Plan for the Unexpected

The greatest drain on personal finances is unexpected events. If you need to replace a boiler, which will be costly, and you have no savings you will be in a tight spot. A loan is a good option but if you need the money quickly, you may not get the best deal. Making sure you have comprehensive household insurance is the smart option. Insurance policies may feel like a waste of money but they are a lifesaver when disaster strikes. If you are clever, you can get the best deals on your insurance policies. Pet owners should buy their pet insurance when their animal is young as the rates are lower. Although the pet will need to visit the vet more frequently later in their life, you can get a better rate if you buy the insurance when your pet is still young and healthy.

5. Save, Save, Save!

This may seem like basic advice but saving is really the most important way to manage your finances. Once you have a controlled budget of your spending, you can see how much money you can feasibly put aside each month in savings. Research which savings account is best for you and keep an eye out for better deals. Saving is not limited to savings accounts, however. A great pension scheme is another way of saving for the future. Always opt in to pension schemes if your employer offers them and you can never be too young to start putting money into your pension. Managing your personal finances is easy once you have the basic principles!

Corinne Kemp – Finance Writer and Researcher for Peregrine Finance

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