The LoanPig Guide To Money Management

Managing money is incredibly challenging and it is something that countless individuals have difficulty with every single day. It is not a skill that people are born with, unfortunately, and you will need to learn effective money management skills. In this blog, we will be explaining for you the best practices when it comes to managing your money. Read on to learn some of the best tips and tricks for helping you with money management!

Learn What You Have Got To Work With

Though this may sound relatively simple it is often overlooked or ignored completely. Knowing how much money you have got to work with each month is the first step in positive finance management. It can form a solid foundation from which your applicable skillsets grow! So how to do you do it? It is very easy. All you need to do is take your monthly wage, or total income per month and that is how much you have got to work with. What you now need to do is subtract all of your permanent outgoings, or things you pay for every month without fail. These would include:

  • Rent or mortgage payments
  • Energy, gas and water bills
  • Internet and mobile phone package
  • Council tax
  • Travel costs
  • Car insurance and car tax

The above is of course by no means an exhaustive list. Once you have subtracted everything you need to pay for then you have got your monthly budget. If something changes with your financial situation then it is important to repeat this step so that you have an accurate monthly budget.

The next step would be to subtract all non-essential outgoings from your budget. These things include food, money spent on clothes, etc. The idea is to know EXACTLY how much money you are spending in total each month. If you are in a surplus (have money leftover) then this is a positive. If you are however in a deficit (are spending more than you are earning) then this is a massive negative, and you need to address this immediately and effect some positive changes to your personal money management.

What To Do If You Are In A Deficit

If you are currently in a financial deficit then the first thing that you need to is to not panic. This is a cause for concern but you should not let it bring you down as there are many things that you can do in order to get yourself out of this deficit. One of the most important and effective methods of doing this is to cut out all of your unnecessary expenditure. What follows is a list of/examples of how to cut out the frivolous and replace them with the practical:

  • Instead of buying small amounts of food at a time, for just one or two meals for example, buy in bulk or buy frozen food to save you a lot of money in the long term. It is a general rule that the greater bulk you buy in the cheaper the product (or cost per item) becomes. Large bags of rice and pasta, larger packets of chicken and frozen broccoli, for example, cost less per kg than the smaller packets of the same product.
  • Buying yourself lunch each day, in the form of a meal deal, a Subway or a McDonalds will be costing you so much per month, and is therefore not a cost-effective or a healthy way to have your lunches. You need to be making yourself a packed lunch as this could save you a lot of money per week, can be much healthier and you have more choice!
  • Do you buy yourself a cup of coffee every day on the way to work? Or with your lunch? If you do, then you could be wasting a frightening amount of money each month. Investing in a solid thermos or travel mug can help you to save a lot of money. This is simple and easy, just make sure you leave yourself enough time in the morning to make your coffee or tea!
  • To further enhance your money management skills we would recommend that you don’t spend your expendable income on brand new clothes, or brand new video games, for example. Instead, you could make use of eBay or sites that specialise in the selling of second-hand clothes. You could also wait a few months for the games to reduce in price!

These are of course just examples that when used can enhance your money management skills. Your budget needs to be something you live by, don’t exceed it and be strict with yourself and rigorous with your own spending. Once you have gotten a hold of your outgoings, with a solid budget in place (and have total clarity regarding the amounts you have to work with each month) then without a doubt your money management skills will improve vastly.

What To Do If You Are In A Surplus

Being in a surplus is a good thing, and if this applies to you, then congratulations! This means that you already have a good grasp of money management, or at the very least you are aware of the basics. If this surplus is considerable, then there are a few things that could or can do in order to maximise the positives of the situation:

  • Consider starting a savings account, adding to a rainy-day fund or getting yourself an ISA
  • Try to increase your surplus even more by following some of the above listed tips and tricks
  • Make sure you are still aware of all of your outgoings and expenditure
  • Keep a budget and be strict with it
  • Carry on doing what you are doing!

How Can A Payday Loan Help?

Here at LoanPig, we are specialists in payday loans and short term loans. We offer our services to people who need them most. If you find that your money management skills are lacking severely then you can use our loans to help you out of financial difficulty. Contact us today to learn more about our payday loans, and please use our application form to see how much you can borrow and how much it will cost you.