7 tips for successfully organising your finances

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Having well-organised finances is beneficial for a number of reasons. Not only does being organised mean you can enjoy financial independence and have no need to take on any type of debt unnecessarily, it gives you peace of mind and ensures you can have positive thoughts and feelings about money, and use your organised state to save and plan for a bright and exciting future.

One of the great things about financial planning is that you can be organised, successful, and maximise your money whatever you earn, leaving you to enjoy life and focus on the things you enjoy. Here are seven tips for successfully organising your finances.

Create a Budget

Creating a budget is always the first step for successfully organising your finances. It may sound daunting now, but it’s easy to do and can make a big difference to how you view your money right away.

You can read our blog on creating and managing a budget for more tips, but the key things you need to do include:

  • Calculating your income and expenditure.
  • Separating your expenditure into fixed and variable expenses.
  • Monitoring your spending so you can tweak your budget to suit your financial goals.
  • Breaking down your finances into what you need to spend, what you want to spend, and what you want to save.

Once your budget is in place and you’re committed to it, you’ll instantly enjoy a greater degree of control over your finances.

“Creating a budget is always the first step for successfully organising your finances. It may sound daunting now, but it’s easy to do and can make a big difference to how you view your money right away.”

Make Savings Non-Negotiable

Many people who don’t have savings will use the excuse that they don’t have the money to do so, yet will actually be spending their disposable income on things they don’t really need. If you’re serious about organising your finances, making savings a fixed, non-negotiable expense similar to your mortgage or other regular bills is worth doing. This ensures you’re always saving and putting money away – even if you don’t have a specific savings goal – and means you’re covered for unexpected expenses or life events, such as needing to undertake emergency home repairs or being made redundant.

Having the equivalent of six months’ income saved is often cited as a good starting point, and means you’re well covered for whatever life throws at you from a financial perspective. If you don’t need the money for emergencies, you’ll at least have a good safety net if you want to leave your job to start a business or take an extended break.

Pay All Your Bills on Time

One of the easiest ways to lose money is to not pay a bill that is subject to a late payment charge if you’re as much as a day late with it. Considering how easy it is to set up direct debits today, there is no reason for this to happen to you. When setting up your direct debit you can ensure you choose a day that suits you and include this within your budget planning to never miss a payment or incur a late payment fee again.

Plan to Avoid Bank Charges

Another often self-inflicted financial problem is not having enough money in the bank to cover a direct debit payment, which gives the double problem of a bank charge as well as a potential late payment fee. An additional bank charge many people simply accept and consider a part of life is interest and other charges related to an overdraft. While an overdraft is a useful and sometimes needed safety net, you should ensure it remains just that at all times.

If you find yourself using your overdraft as essentially a credit facility, look to use the savings you achieve through budgeting to ensure you’re living with your bank balance as zero as much as possible rather than using the additional facility from the bank.

Maintain a Great Credit File

If you pay all your bills on time and do your best to avoid bank charges, then you’re probably already doing a great job of maintaining a great credit file and score. While having a clean file won’t help you save money on a day-to-day basis, it does mean you will be offered better interest rates should you apply for a personal loan or another form of credit.

You are entitled to free access to your credit report and score and should spend some time ensuring the information held on your credit report is correct. If you have had problems with debt in the past of have a chequered credit history, our recent blog on repairing your credit rating could help you.

“While having a clean file won’t help you save money on a day-to-day basis, it does mean you will be offered better interest rates should you apply for a personal loan or another form of credit.”

Take Advantage of Technology

In the blog post highlighted earlier regarding creating and managing a budget, we speak about using financial apps and Excel templates to make it easy to visualise your financial reality. Another way you can take advantage of technology is to use online banking services and online account management for credit cards and any other personal finance or credit products you use. This means everything will be kept in one place, and if you ‘go paperless’ you save yourself the stress of managing statements and keeping them stored safely at home.

Prioritise Debt Repayments

Prioritising debt repayments can be difficult, particularly if you find yourself trapped in the debt cycle where you’re paying a credit card bill then relying on the same credit card for subsistence, thus building up the bill again. When planning your budget be sure to factor in debt payments and look to use any money savings to pay these off quicker.

Focusing on clearing your debts will:

  • Make you feel better
  • Give you a feeling of control back over your finances
  • Help prevent damage to your credit score beyond any already incurred
  • Reward you with a large chunk of your income when you have paid them off in full and now have the disposable finances to use as you please

Organising Your Finances

By being organised with your finances, you can break out of the debt cycle, ensure you don’t live a pay cheque to pay check existence, and have the confidence to live the life you want. Remember to take a proactive approach to dealing with your finances, and set budgets and goals relative to your personal circumstances and to what you want to achieve.

Disclaimer:  This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs.  Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.

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