A survey of Britain’s personal finances by the City regulator discovered that half of the UK population are financially vulnerable with one in six people unable to cope with a £50 increase in monthly bills. Another study showed that over 4.1 million people in the United Kingdom are already in serious financial difficulty, falling behind with bills and credit card payments.
So if you always find yourself short on rent and bills, you are not alone. Your situation is understandable given the uncertainties of today’s economy. However, worry doesn’t solve much because bills will never stop coming. It is one of the realities of life we have to face as an adult.
Unfortunately, financial stress can make one age faster. In fact, it is one of the reasons why most people are not living healthy lives because they are so worried about their financial situation.
Here is a plan; stop worrying about your money problem and decide to do something about it today! It is not going to be easy but you can do it. Fortunately, this article will give you some strategies to solve your money concerns.
Below are some strategies to help you reduce your money concerns and get motivated to take control of your finances:
1. Save and Invest
One of the reasons why most people have financial difficulties is because they always spend more than what they are earning. You can never have enough if you are always maxing out your credit and taking payday loans to spend on trivial things.
You can have less financial difficulties if you form the habit of saving. Make sure to save or invest at least 10% of your income before you start spending. Once you receive your salary, put 10% of it into savings right away or invest it. Don’t wait until you finish your spending before saving. Save first and then spend what is left after saving.
2. Live on Cash Only For 3 Weeks
Credit and debit cards are perhaps, one of the greatest tragedies to our finances. It allows people to develop terrible money habits. People now pay for unnecessary products/services without giving it a second thought because they are paying with cards. According to a study, consumers spend up to 15% more per purchase when they are paying with cards instead of cash.
If you are not careful about your card usage, chances are you could rack up large debts which can affect your major life choices such as starting a family or sending your kid to school. Research has shown that you are more likely to save when you spend cash only. This is because you will feel the “pain” each time you bring out the cash to pay.
Reserve your credit/debit cards for emergencies only and pay with cash only. Try this for at least 3 weeks every month.
3. Increase Your Income
With more income, you will have more financial power and less money concerns. Supplementing your current monthly salary with just a few hundred pounds can make a huge difference to your entire budget.
You can get a temporary or seasonal job that will allow you to supplement your current income. Fortunately, there are tons of websites where you can get freelancing work with flexible working hours. Check out websites such as Upworkprovide and FreeeUp for freelance works you can do to increase your current income.
4. Create a Spending Plan or a Budget
Experts believe that if you don’t have a personal budget or spending plan, it is only a matter of time before you run into a financial crisis. Creating a spending plan or a monthly budget is one of the smartest things you can do to take control of your finances.
A budget or spending plan makes life so much easier because it guides you on how to spend your money purposefully. You can easily cut out expenses you don’t need and learn to save. Fortunately, there are tons of personal budget apps you can download from Google PlayStore or App store to guide you on how to prepare an effective and efficient personal budget.
5. Identify Expenses You Can Reduce
Not every spending is necessary. You can decrease your monthly spending by cutting out unnecessary ones. You can cut down expenses by using less heat and turning off your light when you are not at home. Look for one expense that is taking a big chunk of your monthly budget and find a cheaper alternative.
Check through your subscriptions and remove yourself from unnecessary ones. The trick here is to look for ways to cut out unnecessary spending and increase your savings.
6. Opt For Overdraft
If you are constantly taking loans from payday lenders every month because you earn too little, you can switch to overdraft and save money on late payments. Overdraft option allows you to access extra funds through your bank account. This way, you can get extra cash without accruing overdrawn or dishonor fees.
Unlike other loan options, you don’t have to set a repayment schedule when you opt for an overdraft. Instead, you can make repayment when you have enough income to pay for it. Check with your local bank to see the type of overdraft and options available to you.
7. Create a Plan To Pay Off/Write Off Your Debts
Getting an IVA (Individual Voluntary Arrangement) may be the smartest decision you will make to solve your money problem. Like we mentioned above, one of the reasons why people have money concerns is because the feeling of being indebted can be overwhelming.
Fortunately, you don’t have to let the weight of your debt steal your happiness and ruin your relationship with those you love. With IVA plan, your debts will be completely written off in just 5 years no matter how big they are. There is no upfront cost and your pension won’t be affected. You can finally sleep peacefully at night without worrying that your debt can ruin the future of your children. You can click here to see how this plan works.
These strategies above are just a few steps you can take today to significantly reduce your money concerns and alleviate your financial stress. These are possible only if you are determined and focus. Take small steps each day so that it won’t feel overwhelming. With time, you can overcome your current money problems.
What other money strategies work for you?