Managing your finances is no joke. Even if you earn a great salary, ensuring you still have money left at the end of the month can seem hopeless – let alone moving towards your financial goals.
Yet, there are many simple steps you can take to help make your money seem more manageable. So, what are they?
In this article, we’ll share four tips for better finances in 2024.
Create a budget
It’s easy to lose control over your finances when you don’t have a plan, which is why it’s so important you make a budget. This will give you clearer idea of how you need to allocate your spending so that you can build towards your goals.
Try the 50/30/20 budgeting rule for a simple wat to do this. First you add up all your sources of income. Next, you track how much you spend on your regular outgoings during an average month. You need to reduce this until it’s around 50% of your income. You then put 30% towards things you want. This leaves you with 20% to go towards your financial goals – whether that’s making a safety net, clearing off debts, investing or something else.
Make a safety net
Having savings to fall back on in times of emergency makes a huge difference. It can mean the difference between being able to patiently weather the storm and feeling completely powerless over your finances. That’s why it’s so important you save up and create a safety net or emergency fund for yourself. A good rule of thumb is to have at least 3 months’ worth of your monthly outgoings stashed away. That way, you’d still be able to keep your costs covered if you were unable to work for a few months.
Clear your debt
If mounting debts are causing you to struggle with your finances, then you’re not alone. In fact, data published by Statista suggest that UK household debt has more than doubled over the last twenty years. It’s vital you address you get to grips with your debts as much as you can in 2024, as they only get worse the longer you leave them because of compound interest.
You have plenty of options when it comes to clearing your debts, ranging from the snowball and avalanche methods to taking out a debt consolidation loans. Whichever you choose, make sure you stick with it over the long term for the best results.
Cut your spending
Take some time to consider all the different things you spend your income on and see if you can find areas in which to cut back. This doesn’t mean going without the things you enjoy. You can make small changes that don’t impact your lifestyle, like doing bulk grocery shopping, getting rid of any subscriptions services you’re no longer, or shopping around to find a better car insurance deal. Small changes like these add up, helping you save a significant amount of money in the long run.
Improving your finances may seem complicated, but you can make great progress by following our simple advice above. Which of these tips could have the biggest impact on your finances in 2024?
