From simply going over your budget all the way to high interest charges, a lack of organisation will significantly impact your finances over the long term. On the other hand, good financial housekeeping will help you to achieve your goals.
If you’re nervous about how to look after yourself in this way, here are six ways to help you to get on top of your monthly finances.
Build your credit score
According to The Money Charity, the average UK annual interest per household in 2022 was £1,617. Building a good credit score is one way through which you can avoid paying large amounts of interest per year.
Creditors look at your credit score to help them to decide how safe it is to lend money to you. The amount of interest that they charge you depends on the state of your credit history.
Make sure that you improve your credit score with the following good habits:
- Make regular payments on time
- Keep your credit utilisation low
- Keep your personal details up to date with banks, lenders and the electoral roll
Take these actions consistently and you’ll greatly improve your chances of improving your credit score month by month.
Review your budget
Things change over the course of a year and even month by month. This means that it’s important that you review your budget regularly to ensure that it reflects your current bills, goals and circumstances.
Be sure to leave enough wiggle room in your budget to accommodate unexpected expenses, such as medical emergencies or fluctuating prices.
Live within your means
In short, this means spending less money than you earn. The extent to which you do this determines how much you can save towards your financial goals. It also determines the size of the safety net that you have available on which to fall back in case of financial emergencies. With the UK average household saving rate at 6.8% in Q1 2022, this is one area in which many people could improve their financial organisation.
Pay bills immediately
As long as you have enough money available, you should always pay your bills as soon as you receive them. Doing so will allow you to minimise your stress, save money and be eligible for lower-interest loans in the future.
Use two bank accounts
As well as having a separate account for saving, you might find it useful to have two or more bank accounts. Use one account for your daily spending and the other for paying bills and making other regular payments. This will help you to better organise your spending habits.
Organising your monthly finances can be challenging but, by being proactive and implementing tips such as those above, you’ll be able to better meet your financial obligations and goals.