Despite there being more services available to us than ever when it comes to money management, there are also far more gimmicks, scams and miss sold financial services, making it far easier to fall into debt and not utilise the money you earn to its fullest potential. When we fall into financial difficulty, it can be all too easy to turn to our overdrafts to make up any shortfalls. While payday loans can be a huge help when it comes to financial emergencies, they shouldn’t be relied on permanently. Common sense teaches you that sticking to your monthly budget and living within your means is the optimum route to take when handling your income and expenditure, but this can take effort and may require a little bit of studying too. Investing wisely is the most important life skill any of us can inherit from their parents and more and more parents now have to teach their children the importance of financial education. No matter what the age or income, we can all learnt a little bit more about how to save a few pennies with a few helpful hints and tips.
While some may think that the more you earn, the less you have to worry about budgeting and managing your money, it actually becomes more imperative to do so. Having more surplus at the end of each month simply allows you greater opportunities to invest that money in a way that benefits your overall financial state. Learning about investment funds, stocks and mutual funds can lead to you earning more with your surplus income as opposed to simply letting it sit in a bank account. Letting your investments do the hard work for you and earn you money while you work is something everyone should strive to attain.
Savings and Security
Being good at managing money allows you to accumulate savings and gives you the added security of knowing should anything go wrong, you have the necessary safety net to deal with an unexpected expense. If we were all to review our expenses over the course of a year, it’s easy to see just how often unexpected expenses do occur. Being able to get out of tricky financial situations without the use of a credit card is one of the best life skills we can develop.
Understanding the benefits of different types of insurance can really help in the long run despite you having to pay out more than you get out of it initially. Life insurance, for example, can be a useful thing to have if you are likely to leave a spouse or children, for example, in financial hardship should you suddenly pass away. Although it may not be nice to think about, burials and funerals can be a huge strain financially, so putting a little money away each month can be invaluable in the long term and help ease the strain of your passing.
If you’ve ever struggled to make ends meet and haven’t been able to pay bills or the rent on time, you are already aware of the stress and strain this can put on your health and relationships. Couples who face financial difficulty are far more likely to end their relationship and play a key part in divorces. Financial stress can cause us to lose sleep, get anxious and develop headaches and high blood pressure, making managing your finances a priority if you want to lead a healthier life with the people you love.
Generic advice is not a service regulated by the Financial Conduct Authority.