Having to make difficult financial decisions, like choosing between paying the bills or clearing your debts can be stressful. These kinds of money worries can impact our mental wellbeing and affect our family life.
Ideally we all want to be more financially secure, where our money is stable and we’re debt free. But, as the cost-of-living crisis continues, this currently seems really hard to achieve, with everything from energy bills to food prices going up.
So, taking steps to achieve financial security can be good on both a practical and personal level.
How to be more financially secure: top 5 tips
Create a budget
Budgeting is key to getting to grips with your finances. Begin by looking at your monthly income and outgoings. Look at your bank statements from the last six months and work out how much comes in and how much you spend.
From there, you can work out how much to set aside each month for the essentials like food and bills, as well as any existing debts. This will help you spot opportunities to cut back on spending and to set aside some money for your savings.
Look at the essentials
Look at what you’re regularly spending each month and what you regularly buy for opportunities to cut back. You could change to a cheaper supermarket or cheaper brands. And if it’s time to change your car insurance or phone contract shop around to get the best price.
Manage your debts
Do some research into how you could manage your debts in a different way. For instance, a balance transfer credit card can help make your existing debts more manageable by grouping them all in one place.
This is where your budget will come in really handy as you’ll be able to see exactly how debt repayments line up with your monthly income.
Request a break on interest payments
If you’re struggling to keep up with payments it’s worth speaking to your credit card provider to see if they can freeze interest until your situation improves.
Use different pots
Some banks allow you to separate your money into different pots. This effectively divides your finances up so that it’s set aside for certain expenses. Or, if you have more than one bank account, you can divide your income into savings and bills, separate from your everyday spending.
