Having the money to afford the life you want is a top priority for most adults, but with bills to pay and other financial commitments, achieving this isn’t always easy. You may have aspirations to own your own property one day, start your own business or even finance a wedding, all of which can be expensive. If achieving financial goals this year was the plan back at the turn of 2021, it could be time to re-evaluate and start budgeting for the summer. Here are some top tips to help provide some inspiration for achieving this.
Choose a Lender Wisely
When it comes around to borrowing money again, you’ll want to ensure that the lender you choose is going to be the right one. You’ll also want to assess what you can afford to borrow and repay, whether you’re looking at personal loans, payday loans, or credit cards, you’ll need to budget accordingly to ensure you can maintain it.
Look for lenders that provide you with transparent terms so that you know what’s involved and have no hidden fees or charges on top of what you’re paying. You should only borrow from lenders who are Financial Conduct Authority (FCA) approved, that way you’ll know you have chosen a trusted lender to do business with.
Compare Your Income & Outgoings
The core of budgeting involves fully reviewing your current finances as otherwise, you won’t know how much you can afford to put aside in savings or for a rainy day. You can use online budget calculators to help you achieve this and act as a template so that you don’t forget any important aspects. Go through your list of direct debits and standing orders, any finance-related paperwork or contracts, and your bank statements to then fill this in.
This is much better than doing so by memory alone and will cover everything you receive as an income and all of your essential expenditure. This should then leave you with a disposable income; an amount that is leftover for you to spend on what you want from savings to new borrowing. If you determine you have nothing left over each month or even a negative figure, you’ll then need to review non-essential outgoings and see where you can reduce spend.
Set a Financial Goal
Whilst working through your finances, you’ll want to set achievable goals for your finances, whether that be an amount to save or something you want to buy like property, for example. Setting a goal gives you something to work towards and enables you to plan out how to get there. If, for example, your goal is to save £5,000 by the end of the year, you’ll then be able to work out if this is achievable each month. If it isn’t, then set a goal for a lower amount, then you won’t feel as stressed to reach it and will improve the chances of you sticking to your budget.
Whatever the goal is, you should give yourself enough time to achieve it and make it specific rather than a general goal such as saving more.
Budgeting is never a task people look forward to, but once started and realized, it will help you look forward to a better financial future and more money to spend the enjoyable things in life.