Good financial management is essential for anyone who wants to lead a good quality of life. You need to be able to pay your essentials and manage your disposable income well to maximise your money. For many people, the main goal is getting savings under their belt so that they are secured for a rainy day. Here are a few steps that can help you to achieve this!
Clear Your Debts
The most important thing to bear in mind when you decide to save money is that you should be debt free before starting. By clearing your debts first, you will be working from a clean slate – and you won’t be losing money by paying interest that is so commonly attached to debts. There are various ways around clearing debt that you should take into consideration. Different approaches benefit different people, but the options outlined below should help.
- Consolidate your debts – having multiple debts can be difficult to manage. You’ll have different payments due to different places and, chances are, each debt will have different levels of interest attached. Instead, why not consolidate all of your debts into one place where you can easily manage them? If you get a good interest rate on the consolidation loan or credit card you take out to consolidate your debts, you could even benefit from paying less interest overall.
- Dedicate as much disposable income as possible – you should be living to a budget that takes your take home pay, deducts necessary outgoings (bills, minimum debt repayments, etc) and leaves you with a disposable income. Of course, it’s important to have a life and enjoy yourself. But try to dedicate as much of this disposable income as possible to clearing your debts.
Once you’re debt free, you may want to consider investing. When you invest money, you can see it grow. Of course, investments always come with a risk, so you may want to consult a personal wealth advisory or a financial advisor before making any big investments – especially if they seem too good to be true. You might also want to look into apps that can help you with this. The best investment apps can help you to manage your investments and spot the right opportunities to invest or withdraw.
Open a Savings Account
Of course, you’re going to need somewhere to store all of these savings. The best place isn’t your bank account. Instead, it will be a dedicated savings account. Savings accounts tend to have higher interest rates, giving you a return on the money you have placed into the account. Browse the market for the options with the best interest rates. Also make sure to check the terms. Some accounts allow you to withdraw your money with one day’s notice. Some will require more notice or will only allow you to withdraw for a specific purpose – you may face fees or penalty fines for withdrawing outside of the terms.
The above steps are relatively easy to follow, as long as you stick to it. Hopefully, some of the advice will come in useful and help you to gather savings!