There is no time like the present for getting your finances in order.
Too often, financial health is limited to administering an emergency band aid. However, long term financial stability can only be created through sensible, long term planning. Here are a few tips to get you on the way.
1. Create a financial plan: This is your starting point. You must know what your eventual goals are and where you are heading. Create a realistic plan to achieve your aims and make sure that you insert plenty of milestones along the way. In fact, you should review your financial plan on a weekly basis to make sure you’re on track.
2. Audit your current finances: It is also important to know exactly where you stand financially at the moment. Make sure that you review all your accounts, savings plans and investments to get a clear picture of your finances. Take a close look at your outgoings and work out where you can cut waste. You will be surprised how much you can save.
3. Get yourself a credit report: This is an important part of auditing your finances. A credit report will give you an idea of whether you can expect to borrow significant amounts of money from lenders. As such, it is an important element of your financial planning. You can obtain a credit report free from a registered credit expert such as Experian, as recommended by Virgin Money.
4. Set up direct debits: One of the keys to smooth finances is to allow them run as smoothly as possible. Put systems in place and set up arrangements to enable your financial transactions to be processed automatically. First and foremost, use direct debits. Not only will it be a weight of your mind, but it will ensure payments are made on time, which in turn will boost your credit report.
5. Monitor accounts daily: Once you have your payment systems in place, it is still a good idea to monitor your accounts on a daily basis, just to make sure that nothing has been missed and you aren’t being incorrectly charged. It will also give you a justifiable feeling of control over your money.
6. Try to save 10% of your income: This is a good bench mark if you want to achieve your financial goals. If you can save at least 10% of your income for savings, whether they are short or long-term, then you will likely find yourself in a position to build a solid foundation for your financial growth.
7. Create multiple income streams: Have a careful think about how you can increase your income beyond your salary. There are numerous options, some of which require little time investment. For example, if you have spare space at home or in your parking area, why not rent it out? There are also numerous freelance jobs that you can do online if you have the requisite skills. Think creatively and cash in.
8. Keep an eye on the financial media: Be proactive in monitoring financial trends. You don’t need to be a financial expert to be aware of whether shares are rising and falling and in which direction interest rates are moving. You just need to make time in order to do it.