Managing your finances can be a difficult thing to do but it is essential for securing your financial future by planning in advance which helps you stay on track and save. Focusing on key areas such as budgeting, building an emergency fund, managing debt and entitlement to benefits as well as pensions can create a stable financial foundation.
Budgeting
The first step in managing your finances is creating a budget. A budget will track income and expenses making sure you are spending within this budget and are still able to achieve your financial goals. It is usually a good idea to start with listing all sources of income and categorizing your expenses. Common examples of this may include housing, food, utilities, travel and leisure.
The 50/30/20 rule is a popular budgeting method this suggests allocating 50% of your income to needs, 30% to wants and 20% to savings/debts. This helps with structuring your income and having some flexibility with it. You can find a free budget planner here Budget planner | Free online budget planning tool | MoneyHelper
Building an Emergency Fund
An emergency fund will provide protection against unexpected events and act as a financial safety net. This fund can cover expenses such as medical bills, car repairs or sudden job loss. Financial experts recommend saving 3 months’ worth of living expenses in a separate account to avoid any financial difficulties. Having an emergency fund in place can help to avoid relying on credit cards and loans and to stay on top of your finances.
Managing Debt
Debt management is a crucial aspect of financial health. Uncontrolled debt can spiral out of control affecting your credit score and financial wellbeing. The first thing for managing debt is to figure out what you owe by creating a list of debts including credit cards, loans and the minimum payment for each one. It is important to have a debt management plan in place to start making repayments and regain control over your finances. For more support on debt management visit StepChange Debt Charity. Free Expert Debt Help & Advice
Benefits
Understanding the benefits available to you can help improve your financial situation. Many employers offer benefits such as health insurance, retirement plans and paid time off. Make sure to review your benefits package and take advantage of this. Additionally, government programs and tax credits can provide financial relief. Checking eligibility and utilizing this can improve your overall finances in building a strong financial foundation. More information on benefits and eligibility can be found here Tackling Financial Insecurity Together | Turn2us
Pensions
Saving into a pension is an investment which will give you an income in the future and this is the most tax efficient way to save for your retirement. If you are employed, you can find out about a workplace pension which your employer may also contribute too. More advice and information on pensions can be found here Pension Wise: free pension guidance | MoneyHelper
