Time to organise your finances!
Money isn’t everything, but it can make a huge difference in your life. When you’re young, particularly, money doesn’t seem to be of any great importance, as long as you’ve got enough for your immediate needs. You tend not to look too far ahead, and if someone mentions a pension to you, or a mortgage, you mentally switch off. It’s just not exciting enough to spark your interest.
Then, a few years down the line, you realise you should have paid more attention to your financial situation. Saving for the future, financial planning, creating security for your later years, all those boring things you couldn’t be bothered with come back to haunt you. Why didn’t you take care of business when the time was right? Why didn’t you make plans for the future? Could it be that when you’re young, your only ideas of the future involved visualising a science-fictiony time when we’d all be zooming around with rocket-powered backpacks and taking holidays on the Moon? Well, maybe your ideas of the future should have included finding answers to questions like how do you get money, and how can you organise your finances so that you make the most of it.
Well, it’s time to take a look at some suggestions and ideas for organising your finances. And if you’re still young, pay attention and make the effort. It’s later than you think!
Save regularly – it’s never too early to start
It’s the easiest thing in the world to convince yourself that you can’t afford to save, but saving money is too important to ignore. You’ve got bills to pay, you’ve got food to buy, you’ve got this and that to take care of, and on and on and on. But the truth is this – of all the things that you have to pay out for, the most important is YOU! When you’re saving, you’re investing in your own future. You are, in effect, paying yourself. So do that first, before you pay anything else.
Saving money is easy! Make regular savings amounting to a small proportion of your income, no matter how much or how little that may be. Put it into an account that’s solely for the future. Never take anything out of that account. Let the savings grow and let interest add to them. Allow those saving to mature, like fine wine. Don’t keep dipping into it, just leave it be.
And years later (and trust me, time will pass, soon enough) … years later, you’ll be glad you saved. It will have built up and you’ll be in a position to make good use of it.
You won’t be asking how do I get money any more, you’ll have passed that point and you’ll be congratulating yourself on having realised early on that saving money is one of the best ways of making money.
Make full use of ISAs as a way of saving money
If there’s a tax-free way to save, and an ISA is a perfect example (and of one of the easiest ways to save), then grab it with both hands. The government isn’t fond of handing out tax-free savings opportunities, so when it does, make the most of them. And add to your ISA fund every year, to the fullest possible extent, and you’ll know you’re doing all you can to avoid paying tax – which can’t be a bad thing. In fact, it’s more than that – it’s a duty to yourself. Finding ways to save is as important as finding ways to make money.
Cut the credit and start to really organise your finances
If you’ve got more than one credit card … why??
Get rid of most of them and just keep one. Then make a habit of paying it off each month, if possible, and it won’t cost you a penny. Credit cards are a very expensive way to buy. Of course, you could alway use the age-old method of saving for something you want and then buying it when you can afford it. I know, quaint idea … let’s move on …
Store cards … give me a break!
Do you really need those store cards? Do you really think those stores are doing you any favours? They’re generously extending you credit (so that you can spend what you don’t have on what you can’t afford and don’t really need, and at their store, naturally) and they’re charging you royally for the privilege. If you take the trouble to work out how much those cards will cost you if you only pay the minimum monthly amount, you’ll be shocked, I promise. I mean, really shocked!
Do yourself a favour – cut them up, throw the pieces away, forget about them. If that store sells something you really want, save up for it.
Live for yourself, not your neighbours
Ask yourself, why do you really want that new suite of furniture? Is it because you really like it, or because you know your neighbours have something similar? Stop the insanity of trying to keep up with other people’s lifestyles. What they have and what you have are two different things. Maybe they earn more than you do. Maybe their taste is different from yours. The simple fact is that their stuff and your stuff is different. Focus on having nice stuff, regardless of anyone else. And anyway, why’ve you been looking in their windows? Don’t you know it’s rude to stare?
Extra cover? No thanks!
It seems every time you buy anything electrical these days, you’re offered extra cover. Even if it’s only curling tongs! The chances of most things failing in the first year are pretty slim anyway, and you can end up paying a disproportionately high charge for insurance cover. And (specially with fairly inexpensive items) it’s really not worth it. If a product needs replacing, it’s probably cheaper to just buy a new one than it would have been to insure it. Extra cover with that? I don’t think so!
Why pay for brand names?
It’s been shown in surveys again and again that cheaper, own-brand supermarket products are generally of equal quality (and sometimes better quality) to more expensive brand name products. Still, people like to go for the brand they know and trust!
Well, at the risk of having you look like a skinflint (as though anyone really cares), I’d suggest you always go for the best deal. Forget the brand names. Remember, part of the reason they’re dearer is because the companies spend so much on advertising. Are you happy to subsidise all that advertising that you find so irritating? Thought not!
Economy deals. Are you sure?
Increasingly, it seems, supermarkets are trying it on with dubious ‘deals’. They know people automatically go for economy size bottles and packs, so they make a big thing of touting extra-large versions of all kinds of products. But if you look carefully, many of them actually work out dearer than buying regular sized items. Don’t be taken in by these scams. Price things carefully. Unless, of course, you’ve got a soft spot for your local supermarket, and you’d really like to give them a bit of extra cash for nothing.
How much do you really spend? Check, if you want to organise your finances
Here’s a very simple exercise, and it’s worth doing if you’ve never done it before, if you’ve been asking yourself, “How can I save money?”. Keep a notebook handy and write down every penny you spend for a week … or even a month. Whether it’s the weekly shopping, or a newspaper, a lottery ticket, petrol for the car, a parking fee, or a packet of chewing gum, whatever … write it all down. At the end of the week (or whatever period), total up what you’ve spent on each item, or on each group (you can lump together papers and magazines, for example, and other things that naturally group together).
You might be surprised how much you’re spending on non-essentials. If you get a coffee from a coffee shop every day on your morning break, you could be spending £10 a week on that alone, or even more. Does that really make sense? How about if you realise you’re spending close to £10 a week on newspapers … and you realise that most of what you see in them you can see on the TV news, or the Internet … and the papers just go into the recycling bin the same day … do you still think it’s an essential outgoing?
I’m not urging you to be a skinflint. All I’m suggesting is that if you find you’re actually spending £400-£500 a year on newspapers, maybe the lure of the daily paper might wane a bit. Same goes for your daily coffee. £500 a year for a coffee every morning … I mean … I know a really good cup of coffee is something special, but £500 a year for a cup a day … is it really worth that much?
Cable, Sky, or Freeview?
Many of us watch cable TV these days, or Sky. Nothing wrong with that. But do you actually use many of the channels you pay for? If you check and find that you don’t, it might be worth switching to Freeview. It will limit your channel choice, of course, but if most of what you watch is on Freeview you could be saving hundreds of pounds a year. Just something else that might be worth checking if you need to cut costs, that’s all.
And if you’re sticking with cable or Sky, maybe you could choose a cheaper package … what d’you think?
There are other pages devoted to helping you get organised, and they’re not scattered haphazardly all over the site. The links to them are all conveniently organised in the sidebar!
>> Get Organised! links in the sidebar >>