When you’re in your twenties, you often have new student loans, plus easy access to credit cards, shopping available at any time of the day or night, and the desire for overseas trips and new cars. As a result, it can be tricky working out what you should and shouldn’t spend money on. Sometimes it’s just too easy to let your spending get out of control and for savings goals to go up in smoke.
However, as much as there are many temptations out there to avoid, there are also plenty of ways to keep on top of your finances and maintain your financial health. From eliminating unnecessary expenses, to setting up a budget and shopping wisely, there are numerous tactics to get debt levels under control. Read on for some simple ways to keep your personal finances in line over the coming years.
Reduce Credit Card Interest
One easy way to reduce expenses is to cut back on credit card interest. You can either make sure that you pay off your credit cards every month, so that no interest accrues, or consider paying only with cash for a set amount of time so that you’re not tempted to make any purchases on items that are not really needed.
If you do find yourself with more money charged to your card then you can pay off within the interest-free period, it pays to investigate setting up a balance transfer credit card, where your current debt is moved to a new card that doesn’t have interest charged on it for a specific time period. The amount of interest-free time can vary substantially according to credit card providers, but generally starts at around three months and goes up to 15 or sometimes even 18 months.
Set a Strict Budget
If you’re worried that you’re too tempted to spend money and won’t close off the year with as many savings as you’d like, it’s time to set yourself a budget. After all, the only way to really cut costs or save more is to know how much money you spend, how much you earn, where you spend your cash, and what your exact financial goals are for the period.
If you’re not experienced in creating and utilizing your own budget, or just want to make the process quicker and easier, consider using a personal finance app. That are hundreds of different options available, so you won’t have trouble finding a solution to your needs.
A popular (and free) application that you might like to test out is Level Money. This “mobile money meter” tracks a user’s cash flow every day, and helps to increase savings. You can link the Level Money system to your bank account and then let the system analyze your income and recurring costs to calculate a suggested spending level for you. This can be either a daily, weekly, or monthly amount, according to your preference.
From there, the app can also recommend a feasible number to save every month, and subtract that amount from your budget so you won’t accidentally spend it. The system can also help you further increase savings by setting up an “auto-save” amount. At the end of each month, if you have money left over in your budget, the app will automatically roll that amount over to your savings account.
Shop Wisely and Cut out Unnecessary Expenses
When it comes to personal finance, little changes can add up in a big way. To help you stick to your budget or to increase your level of savings, you should be careful how much you spend on regular expenses. For starters, shop wisely, whether it be for groceries, clothing, utilities, insurance, or other. Take advantage of discounts and coupon codes as often as you can, and stock up on sale-price items that don’t go out of date quickly, and that you know you’ll keep on using, such as coffee, cleaning products, toothpaste, and diapers.
You can also save quite a bit each year by combining services from providers. Bundle things like your internet, home phone, and cell phone charges into one bill at a single company, so that you can take advantage of discounted rates for the additional business you throw their way. Many insurance providers will also offer decent discounts for taking out all your insurance policies (e.g. car, home and contents, health, and travel) with them.
Don’t forget to consider unessential items when looking at ways to slash your annual bills too. For example, do you really need to drive to work all the time, or would public transport be just as convenient yet much cheaper? Do you really use the gym membership that you signed up to, or would you be better off cancelling it? There are often many “hidden” costs in your budget that can be cut out quite painlessly if you look for them.