Helpful tips for getting yourself out of a financial rut

blankWe’ve all heard the saying that ‘money makes the world go round’, and while your happiness and contempt surely shouldn’t rely on how much you have to spend or how much you can afford, the sad fact of the matter is that money accounts for much of the personal stresses and anxieties that we encounter each and every day.

Want to get yourself into a place where you have a better relationship with money, and aren’t so concerned about it on a day to day basis? We’ve compiled a short list with some helpful tips for getting yourself out of a financial rut. Read on to find out more, and you might find something that helps!

Learning about and analysing your spending

Often people that struggle with their money find it difficult to figure out where it all goes each month, and what exactly they’re actually spending it on. If this sounds familiar to you, then one of the first things that you should be doing is sitting down, going through your different accounts and payments, and getting to grips with your outgoings. You should almost straight away start to feel a little bit better, and from there you can figure out what you can and can’t afford, so you don’t get blindsided with big payments right before payday.

Tip – Figured out how much you pay each month in bills, subscriptions and other monthly direct debit payments? You might want to try consolidating those payments into one monthly date where possible, getting it out of the way rather than having them come out at random points. You should be able to do this online through the respective accounts, or by contacting your service provider/supplier.

Streamline your spending

Once you’ve gotten to grips with your spending a bit better and are more comfortable with it, you then may want to start plugging holes and cutting out things that you no longer need or have forgotten about.

Throughout the current pandemic, despite all the negatives (and the financial implications that you might have been affected by if you’re a small business owner, or work in an industry that has been brought to a standstill), you may have noticed due to being stuck indoors that you haven’t spent as much money each week on things like travel expenses or lunches out. Put this money into a pot, as it will then give you somewhat of a platform when things go back to normal.

Building up a financial portfolio

When you’re starting to get a little bit more comfortable with your spending, you then might want to start building up your finances into something greater, perhaps in preparation for your future. You might have heard about the phrase ‘becoming financially free’, or something similar, and there are a couple of different ways that you can go about getting to this stage. Saving or investing your money are two key steps:

  • Investment – Once you’ve worked hard enough to get to the point where you have earned up a sufficient amount of capital, it’s certainly worth looking into putting that money back to work, and letting it help you earn more. Of course, there are risks that come along with investment – some larger than others depending on the market that you go into – but if done correctly, it can be an extremely lucrative process. If you’re aren’t sure of where to get started, there are a ton of different bits of advice and guides on the internet available completely free. There are some great podcasts, guides and videos on YouTube that you can look up and learn from before taking any next steps.
  • Saving – For those that don’t want any risk involved with the way they keep and build up their money, long-term savings accounts are one of the best zero-risk investments, although the low interest rates typically account for this.

It ultimately depends on the amount of money that you have saved away, and what you could be earning from that money if you were putting it into something more productive. Nevertheless, saving for the future is always a good way of ensuring you’re secure in the event of a financial emergency (such as the one we’re in now for many people), and you need something to fall back on.