Hello Dear Reader,
Do you find yourself counting down the days (or maybe even hours!) until payday? Sometimes our pay packets can’t come soon enough, especially if we’re faced with paying for an emergency such as a broken down car, bill from out of the blue or home repair.
Indeed, that’s why many people panic and turn to payday loans. These are short-term financial products that carry a big interest rate and, therefore, if you don’t know what you’re getting yourself into you could end up paying a lot back (see this guide for more details).
Ideally, you’d avoid the need to turn to such an expensive form of lending in the first place. If you can make your money stretch the whole month, you’ll avoid that pre-payday panic and the need to borrow at eye-wateringly high interest rates. But, how can you do this? Here are some top tips to take on board:
Have a spending audit
How much money do you spend every month on essentials such as your bills or groceries? Until you know this you’ll find it difficult to accurately plan out your finances. Go back through your last three bills and make a note of every regular expense you have. This should give you clarity in two ways: you’ll know how much money you have left over after all of the essentials are paid for and you’ll be able to note when all of your bills come out of your account.
Look to cut your regular spend
After you’ve done this, you should look to see if there are any ways to improve the way your finances look. Could you cut any of those bills by switching to another provider? Are there any subscriptions or memberships that you could axe completely? (As a nation we waste a lot on gym memberships). Any money you can save here will free up extra cash to boost your spending pot for the month.
Split your cash into a weekly spending limit
Once that’s all done then it’s time to split your disposable income into four equal chunks. This should give you a weekly spending limit and help you to avoid blowing it all on shopping or meals out in the first week of the month. Clearly, life isn’t always as neat as that but if you over spend in the first week then you should adjust your weekly budget from there so that you know to rein things in for the rest of the month.
Create a rainy day fund
What if things go wrong? No matter what you plan, something can always come along and throw you off course. That’s why it pays to have a rainy day fund. Set aside a little pot of money that you can easily tap into – maybe in an easy-access savings account – and turn to this if an expense comes at you from out of the blue. Even a small amount could be extremely useful and lessen the blow. If you’ve ever got a little bit of your spending money left at the end of the month it makes sense to pop this in your rainy day fund so it will help to ensure your money stretches further in months when money is tighter.
Keep a calendar of big events
Some things really shouldn’t be a surprise to us. Birthdays of family and friends, for example, or wedding anniversaries happen on the same day each year yet how many times have you forgotten until it’s too late and then be left short of cash? Put these dates, along with that of Fathers Day and Mothers Day into a calendar along with any other key events that you need to be aware of, so that you can plan ahead.
Learn how to use your overdraft
Spending more money than you have in your current account can prove costly if you’re not careful. However, an agreed overdraft limit with a bank that has low fees and charges for this can ensure that your overdraft offers you something to dip into in an emergency. As long as you appreciate that an overdraft is a form of debt – and understand the cost involved – this could be a part of a sensible money management plan. This is best used for short term necessities and is not best when used repeatedly but can be very useful when used to your advantage.
Here’s just a few ideas from me, but feel free to add some more yourselves. I love hearing from you all.
Love Froogs xx
Sponsored post – as usual, all my opinions are my own.