fix your finances

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Admit it! You are over spending on worthless ‘stuff’ and don’t have a clue where it all goes?!

Yes, so many people feel like this!!! I really can’t tell you have many people have said this to me. “I don’t know where it all goes?”

STOP SPENDING… that’s it!! Just stop… That’s the answer…

This is easy to say and much harder to do, yet, there are some really easy things you can do to save money. Remember the old saying, ‘look after the pennies and the pounds will look after themselves’. It doesn’t matter how much money you have in the bank or how well you budget, most people overspend even with the best intentions.

So this is where we have to change our habits, habits which have been built up over years and also passed down from our parents.

What is a habit? It’s something that you don’t think about, something that you see as part of your daily routine, but may be completely unnecessary to your health and wellbeing even if you enjoy it. It can also be something that you used to do with old friends, and now you have moved on, you still do it because it’s what you always have done.

Here we are trying to help you change old habits and make new ones which will save money rather than spend it. A bit of focus and thinking before you buy, can help you keep the money in the bank at the end of every month.

So, to start with, you need to track what you are spending, this can be enlightening as most people don’t track what they buy throughout the month and are then surprised that they are in the red at the end of the month. Start making a list of everything you spend. This will then tell you what is unnecessary and what a habit is.

How do you change a habit?

According to leading psychologists, it takes 21 days to change a habit. This is a generalisation and it doesn’t take into account how long you have had the habit for and how hard it could be to break. It does however give us a starting point and proves that it takes time to break an old habit and form a new one, so basically, don’t expect things to change overnight!

The next important thing to realise, is that you can’t change them all at once. For starters you will get burnt out and bored and stop everything, and secondly, you get into overwhelm, which can be even worse as you cling on to the old habits to give yourself comfort! Also, make small changes, something huge will send you into panic mode and that will stop you in your tracks.

We form habits for a reason. So start to look at the reasons why you have your current habits. Once you see the emotional and sensory triggers behind your habits, you can then start to look at ways to replace those old habits with new ones that are perfectly able to give you the response that you desire, but are also helping you keep the money in your pocket at the same time.

Make the new habit easy for yourself. Having things in handy places at home, or shift your workplace around to make it easier for you to put the new habit in place. In return, make the old habit hard, so make sure there is no spare change in your pocket, or move money about in your accounts so that you can’t spend that money. Also, give yourself little reminders, such as a note in your purse to ask yourself ‘do you really need that’, or a reward chart for the kids to turn the lights off when they leave their bedrooms.

If you falter, don’t panic, just tell yourself that tomorrow will be better. Maybe ask one of your friends to watch out for you and distract you!

Why are you wasting so much money? 

So we have changed our habits, yet we still don’t know much about our money. What do we need to learn to improve how our money grows?

Your financial intelligence is all about knowing how money works, what the government decides on law to do with the regulation of investment and what the law states for business. So if you don’t understand the laws and rules that are relevant to the finances you have in place then how will you know whether you are getting any return or profit on your savings or investments. Having some financial intelligence allows you to create a better plan for your money so that what you have will grow more effectively and what you intend on having will actually happen.

So, we may now have some disposable income and some savings, but are they really working for us? Are they moving us towards our goals in life or business? We have a mortgage but is it in best place?

Look at short and long term debt

A long term debt would be your mortgage, usually taken over a period of around 20 years, your working lifetime. A short term debt could be a loan for a new sofa or a car over a period of 2 or 3 years. If you look at the interest rates you are paying you will notice that normally the mortgage will be at a much lower percentage than the short term loans.

What does this mean for financial management? Well when you get to a point that you can start paying off debt, look at short term debt first to get rid of them and then tackle the long term debt a bit at a time. You will get rid of the debt that is charging you the most interest, which will give you more substantial disposable income to start paying off the long term debt more quickly than you would have done before.

Create a plan to move forward with

Having a plan gives you a focus and allows you to create goals of where you want to be financially over time. Maybe you want to be debt free in five years, then write a plan of how you are going to achieve that.

Think about where you want your money to be in five or ten years’ time? Is it in your children’s trust funds, in your pension or paying off credit? Which would you choose?

Get the basic’s right first

Looking at your general spending, what is going out each month is a major and important step. It sounds so simple but often the basic simple stuff is what matters. Will you do it through? Will you put the time aside to achieve the basics? Without the foundation, we aren’t able to build a strong position.

Let me help you a little by giving you this free spending guide on ‘Practical examples of changing habits to save money’ providing you with a number of practical ideas to help save those pennies.  Plus as an added bonus when you download the guide, you’ll also receive the check list of outgoings. This check list will list all the possible outgoings to make a note of and review. Make a note of any review dates and see what needs adjusting or cancelling. When you download this handy checklist and guide, we will also add you to the mailing list to receive further emails to help you change your spending habits for good….
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