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How to get your finances in order at home

With everything going up in price and the cost of living rising, getting our personal finances in line is so important. With bigger bills on the way, having a handle on our money allows us to plan for the short term as well as the long term future. Talking about money isn't always easy. Organising our income isn't something we all have the skills to do. Let's have a look at how to get your finances in order.

get your finances in order

Know exactly what is coming in

Firstly, to get your finances in order, we need to know exactly what is coming into your bank account every month. What are you making from your job? What is trickling in from side hustles? How about any benefits that you are entitled to? You also need to look at what you are spending every month. On energy bills, food shopping and even takeaways. When you figure out that exact number, you can see what you have left over at the end of each month. Some of us might create a minus number, which means we are spending more than we earn. When you know exactly what money you have, you can find ways to save it. 

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Open and honest communication

It is important if you are in a relationship or family to have open and honest communication when it comes to finances. Hiding debt from your partner or spending money you know you shouldn't be isn't a good trait in a relationship. If you are wanting to get your finances in order, you need to talk about it with loved ones. This could be a monthly finance night, where you work out everything that is in and out of the household that month and move around any leftovers into other accounts. So many people don't talk about money and that can be a stumbling block to falling into other issues such as debt.

Pay off debt

Debt is a huge issue for many people. In order to get your finances in order, you must face your debt head-on. Burying your head in the sand does not make it go away. Tackling debt, chipping away at it one bit at a time allows you to work towards a better financial situation. You can organise your finances and pay down your debt every month. Once you have cleared that debt and no longer have that outlay to contend with every month, you can begin to save. Debt can become a shackle around your ankle if you do not work hard on clearing it. 

get your finances in order

Use automation to save both money and time

What bank account do you have? How much time do you spend visiting your local branch or logging into your online banking? Did you know that setting up automation can help you save both time and money? Set up a payment just once and it can repeat over and over again without you having to do anything. This is a great way to move money between accounts and save into specific pots. If you split your finances across different funds so you can save throughout the year, knowing your money will be there when you need it, set up automatic transfers. Automation is a great tool and can help organise your finances whilst you get on with other parts of life. 

Educate yourself

If you struggle with finances, you need to educate yourself. There are lots of fantastic blogs, just like this one, where you can equip yourself with knowledge. There are YouTuber channels and even free courses you can enrol on. The CAP Money Course, for example, is a revolutionary money management course that teaches people budgeting skills and a simple, cash-based system that really works. Read books and gets hands-on with online banking. Look into investments and how you can actually look after your finances. The more you do, the easier it will become. Finances appear scary to a lot of us, but breaking through that fear is so important.

get your finances in order

Save into an emergency fund

An emergency fund can help you out of a lot of holes. You should view your emergency fund payments as another bill you need to pay. By funding this emergency pot of money, you can dip into it if the worst happens. What do you do if your car breaks down and you need it for work? What happens if you lose your job? How about other emergencies such as urgent home repairs or perhaps even medical bills? An emergency fund is there to help, so you don't have to worry about finances and your energy can be spent on the things you need it to be. Setting up an emergency fund can be a great way to get your finances in order.

Save throughout the year

We all have things that we have to pay for every year. Things we know will come up and we'll have to shell out for. These annual payments might include car insurance, road tax, home insurance and even Christmas. When we know how much we need, which we should do based on previous payments, we can put aside a little bit every week or month. If our car insurance is going to be £240, that's £20 a month you need to save to pay that annual amount. If you spend £400 on Christmas last year, that's just over £33 a month to have the same amount for next Christmas. Saving throughout the year means you get the money you need to pay those cheaper annual payments (compared to paying monthly).

get your finances in order

How to start managing your business finances

Plan your financial goals

Being able to get your finances in order at home also means looking ahead. What are your short-term and long-term financial goals? You might want to pay off the credit card you've been using in the short term. However long-term goals could include getting a house deposit together for your own property. Figure out those goals and you can start working towards them. 

Make & stick to a budget

One of the most important things you need to do when you want to get your finances in order is to make a budget. Not only make one but stick to it. When you budget, you know what money you have to work with. You can budget for household bills, emergency funds, pots of money for holidays and lots more. Budgets are hard to make and even harder to stick to. However, when you have one in place and use that as the skeleton of your personal finances, you can move towards a happier financial position.

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