For many people, finances can be a scary topic and one which has been compounded by increased inflation, not to mention the global pandemic, which has affected so many people’s livelihoods.
When looking at your personal finances it can be a minefield, never knowing how much to spend and what you should be saving, but with these few handy tips, it doesn’t have to be scary. You’ll be on your way to financial freedom in no time.
The 50, 30, 20 method
The 50, 30, 20 Method is one of the most popular ways to save money and to put in to perspective how much money you have to ‘play’ around with.
– 50% of your income should go to bills – things like rent, phone contracts, supermarket shops and any repayments you have to make.
– 30% of your income can be spent on ‘fun’, eating out, takeaways, entertainment, unnecessary shopping, subscription services etc.
– 20% of your income should go into savings. This allows you to still enjoy yourself whilst building up a pot of savings for the future.
50, 30, 20 doesn’t work for everyone as it is subject to what you earn, however, you can tailor this method to your salary.
We’ve all been there – left gym memberships rolling even when we haven’t stepped foot in there for months. That’s up to £100 wasted every month! Think of what you could have done with that money had you cancelled when you stopped going. And, do you have more than one TV subscription? Netflix? Amazon? Cancel the one you don’t use that often. Every little bit helps!
Listen to music? Spotify allows you to have joint accounts with your friends or partners! Instead of £10 per month you could be paying £3!
Follow personal finance accounts
When seeking financial freedom it is important to follow the right people and seek positive advice. For example; Martin Lewis runs a money saving website on which you can find all kinds of deals, tips and advice, plus helpful warnings about certain schemes.
Track your expenditure and savings perhaps using an app or just an excel spreadsheet. This will help you see what you’re wasting money on and show you how much you could potentially be saving. Savings are important because you never know what is around the corner, it’s good to always have a back up plan. Tracking savings also shows you how well you’re doing and gives you encouragement to keep going – but don’t forget to reward yourself now and then!
Look for money making opportunities
There are so many ways to make money on the side of your current job. Do you have old clothes that you no longer wear? Sell them on Depop, or make use of Facebook marketplace. Do you have a particular skill set that is sought after? Set up your own micro-business!
Another option for generating extra income is to sign up to take part in market research or free surveys. Brand Survey pay you for your opinion! It can take a while but after building 500 points you can get a pay out – even if it isn’t much, it’s an easy way to earn some extra cash.
Keeping on top of your finances doesn’t have to be scary. Remember, you’re investing in your future and nothing is more important than that.
Posted by Abbie Holcroft – Community & Services Assistant at Velocity Virtual’s sister company Headspace Group
Images courtesy of Press Association