One of the first realisations that you are on the ever-winding road to becoming an adult is being able to be financially responsible. To be classed as financially responsible you must be able to live within your means, this is applicable for everyone, but nobody’s circumstances or situations are the same. Whether the difference is you being a stay at home Mother or father where the spouse is the bread winner and you have a budget for house supplies ora couple both working and looking to save for a house. The circumstance maybe be different but being able to live within your annual income is being financially responsible. Here we have 10 exclusive ways to help you to know the benefits of being financially responsible.
Budgets
Make a budget for anything and everything you can think of. Set an amount to spend on food, fuel, bills, rent and how much you want to put into savings. The most important thing with a budget is that you have to stick to it! Going over what you have set shouldn’t happen, so when you set your budget make sure it’s enough to fulfill the requirements of what’s needed. For example, if your food budget for the week is $100 but that means you won’t be able to eat for a day isn’t an achievable budget.
Reduce Expenses
There are many ways you can look to reduce what you spend in between paycheques. You can change where you shop, look for the cheaper supermarkets or suppliers. Consider the own brand consumables, many supermarkets make their own substitute for name brand items and it can be just as good if not better at a fraction of the price. Save on fuel by cycling or walking to work or to your friend’s house.
Savings
Always look at how you can save, how much can you put away for that rainy day? Whilst it is entirely dependent on your income, the recommended amount that you save per month is around 30% of your total salary. Now, this is not possible for everyone as their income and outgoings may not support this, in reality, whatever you can put away is a step in the right direction.
Look at your budgets and if you have anything leftover from food budget add that into your savings.
Emergency Funds
Once we are out in the big wide world without the possibility of support from anyone you need to be prepared in case things go wrong. Look to have a separate account or an amount that you have ear marked for emergencies. You want this to be able to cover you not being able to draw an income for 3 to 6 months. Imagine you lost your job or ended up in hospital and couldn’t work. Having an emergency fund to cover you in the worst possible case until you can get back on your feet removes a lot of unneeded stress.
Increase Your Income
Financial responsibility at work is a great challenge these days. If you want to go away and have a holiday, bolster up your saving account or pay off your credit card, having a second job or income is a great way to be able to achieve this. Whether its part time weekend work or something that occupies an extra hour or two in the evening having a second income that could go untouched into whatever you want will fast track you to your end goal.
Reduce Or Eliminate Your Debt
It’s hard to save or put money towards anything if you have a looming debt. Either credit cards, overdrafts or catalogue buy now pay later schemes charge you a percentage for using their money. All these debts will have minimum payments that you need to fulfil, failure to pay will increase the debt dramatically. Look to consolidate your debts with your bank. If you cannot consolidate with your bank, try and concentrate on one debt at a time. Pay the minimum payments on everything and with whatever money you can spare use to chip away at one debt until that has gone. Once one is gone the amount you can put towards the other will increase as you won’t be putting a minimum payment into the one that has been paid off.
Financial Goals
Goals and targets are great at driving you to what and where you want to be in the future. Having an end goal with incremental steps on how you are going to achieve it are perfect to help you plan for the future. Write down how much you need to save and how much you plan on saving each month. With this information you will know how long it’s going to take you. Things like money for a deposit on a house seem like they are a million miles out of reach but when you put it in a timeline it suddenly becomes much more achievable.
Pay Your Bills On Time
Making sure your bills are paid on time will not only save you money it will help build your credit score. This will help when making larger purchases on finance such as a car or to getting a phone contract. Once you miss a bill you can be made to pay more for a missed payment making saving harder. Look at making bills direct debits from your account a day or two after you get paid to make sure you don’t miss a payment.
Control Your Impulses
Sometimes we can be walking through the mall and see an item of clothing on sale or a motorbike parked up with a for sale sign. Now we all know how appealing this can be but if you give into your impulses and just buy it, you may be satisfied temporally but end up upset that you can’t put into saving as much as you planned. Just say no or avoid shops and if it’s something you think you really need well sit back and think about it for a day and see if your life really would be better with it or can you do without.
Learn To Shop Around
When you really need something whether it’s a bike, a new pair of trainers or car insurance make sure you check the price all over town and across the internet. Try to get the best price as many shops will have sales or discounts. For things like car insurance and energy providers check out the comparison website. Look who’s the cheapest and provides what you need. Then go to the company directly to make sure you are getting the best price; you don’t want to pay more than you have to.
Final Thoughts
Being financially responsible doesn’t happen overnight, if these 10 exclusive ways to help you are out of the ordinary to you then it may take a while to adjust. But you will find the financial stress will reduce and things will get easier and easier. Small steps in the right direction and better than moving backwards or even standing still. Start preparing for the future bit by bit, you will start enjoying the rewards of being financially responsible.
