Do you need some help managing your money? Follow these 10 money management mantras
There is no better time to start managing your money than right now. You might be thinking that you want some more money, or you want to be debt-free, or perhaps you want to start planning for your retirement.
However, many people don’t know how to get started in managing their money effectively. If this sounds like the type of person you are, try these ten money management mantras to get a grip on your finances.
Ten money management mantras
- “I will get myself better deals”
It is easy to get lured into a long-term contract by the offer of an introductory offer or new-customer offer. However, when the initial period has elapsed, you might find that your charges have risen considerably. You should regularly check what you are paying through your direct debits and standing orders. If your subscriptions have gone up, shop around for better deals and change your suppliers. If you do so, you will be one of the three-in-five people who are prepared to change their energy suppliers, and you could make considerable savings.
- “I will prioritise tackling my debts”
Having debts can stifle your plans and make everyday life challenging to enjoy. Therefore, you should make tackling debt one of your priorities. Start tackling debts with the highest interest rates, such as credit cards. Getting rid of high-interest debts first will leave you with more money with which to pay off the capital on your other loans.
Whenever possible, make overpayments on your loans to get them paid off as soon as possible. As you see the outstanding capital amount decreasing, it will remove some of the pressure you were likely to feel about your debts.
However, be aware that clearing your debt can take time, so don’t be disheartened if you don’t become debt-free too quickly. If you are feeling overwhelmed by your debt, you should seek counselling to help with the issue.
- “I will put myself first sometimes”
Helping out your children and family is a natural thing to want to do. In fact, research has shown that more than half (around 56%) of 18-45 year-olds have received a savings boost from their parents. Moreover, approximately 52% of parents have given their children up to £5,000 without expecting it to be returned.
This trait is admirable, but you should not do it at the expense of your own financial well-being. It is perfectly acceptable to put yourself first, particularly when your retirement is looming.
- “I will invest some of my money
Often it can seem like no sooner have your wages gone into your bank account than you’ve spent the whole lot. At times like these, an investment might be the last thing on your mind, but you are missing out on the opportunity to grow your money.
You can invest your money in various ways, with some having greater potential for return than others. ISAs are a good investment vehicle for the short-medium term. With a Cash ISA, you can put up to £20,000 a year into it without having to pay tax on any interest earned. If you think you might need quick access to your cash, you should check for any restrictions before investing in a Cash ISA.
For long-term investment, investing in a pension plan is crucial. Any contributions you make equivalent to the lower figure of your annual salary value, or £40,000, receive tax relief at your highest marginal rate. Any money you put into a pension is locked in until you are at least fifty-five. Therefore, it could be several decades before you receive it, depending on when you start your investment. During this time, your funds benefit from compound interest, giving your retirement fund a significant boost.
- “I will set myself a budget”
Establishing a budget and managing to stick to it can be challenging, especially in an environment where credit is easily obtained. However, budgeting is a fantastic way of gaining control over your finances, preventing you from going overdrawn, and providing you with financial peace-of-mind.
The first thing you should do is arrange all your standing orders, direct debits, and other regular payments to get paid as soon as you do. Doing this will give you clarity on how much you have left for the rest of the month.
It is pretty straightforward to set up a budget. However, there are plenty of apps available to assist with this if you need help.
- “I will take free money offered to me”
You might think that the concept of being offered free money is far-fetched, but there is a time when it’s available. If you are enrolled in a workplace pension scheme, your employer makes contributions equivalent to 3% of your salary. If you were not part of this scheme or chose to opt-out, you would not receive this money. Therefore, it is effectively free money, so think twice before opting-out.
- “I will plan for the unexpected”
Budgeting for regular spending is one thing, but how will you cope financially if something unexpected happens? Paying for unplanned car repairs, broken appliances, or some other emergency can be costly and potentially place you in debt if you don’t plan for them. Setting up an emergency fund is one way to get prepared for such eventualities. A rough guideline for your emergency fund’s size is that it should be sufficient to cover 3-6 months of living costs.
- “I will declutter my finances”
Decluttering your finances and keeping them organised makes it easier to manage your money. Set up separate accounts for bills, savings, emergency funds, and so on. You can then allocate a certain amount to each account and see what you’ve spent and how much you have remaining as the month progresses.
- “I will be mindful of tech spending
There are plenty of opportunities to spend money on technology and online entertainment, including gadgets, TV, streaming, phones, and broadband. The lure of enticing introductory offers makes these purchases even more difficult to turn down. Therefore, you should be mindful of what you are spending on such things.
- “I will ensure my pension is working for me”
Saving for your future is something you should congratulate yourself for doing. However, merely putting money into your pension pot might not be enough. You need to ensure that money is working for you. Regularly check your pension to see if it performs as anticipated and that the charges are not unreasonably high. If you discover either, you might need to take action to address the situation.
If you are thinking about your pension, consider using a regulated pensions specialist such as Portafina or, view the advice at Pension Wise.
Conclusion
Right now is the best time to start managing your finances better. Hopefully, these ten money management mantras will help you get more financially organised.
