How to ensure you always have spare cash
If you are constantly finding yourself struggling for cash after payday and maybe relying on your overdraft or payday loans, it might be time to take a good look at your finances. There is nothing more limiting than finding your bank account is empty or not being able to go out when your friends are and this is a sure sign you are not managing your finances efficiently enough. A lack of finances can also be difficult if emergencies arise, such as urgent repairs or bills. These are some effective ways to make sure you always have spare cash available.
The best way to ensure you always have cash available is to start saving and the sooner the better. You don’t need to save large amounts, but by putting money away – either at home, in a savings account – or both, you will ensure you always have something spare when you need it. It is a good idea to have multiple places for saving money, but even if you save as little as £1 per week, it is still helpful for a rainy day. The aim would be to save about 20% of your earnings though, as this will build into a nice pot of savings if you keep going. Even if you are paying off debt, it is still a good idea to put a small amount away in case you need it. A good way to look at savings is to consider it as a bill which needs to be paid and set up a direct debit so that it comes out automatically, along with your other payments.
You will be surprised at how quickly your spare change can mount up, if you throw your pennies in a jar and these can come in really handy for emergency situations. Most of us don’t tend to use coins when paying for purchases, so round up your purchases, stick the remainder in a jar and you will instantly have some rainy day savings to enjoy when you need it.
Stick to a budget
If you can’t control your spending, you need to become better at sticking to a budget. Work out exactly how much you can afford each day, if you want to have some money left over at the end of the month. There are plenty of apps you can use to track your budget, or you might want to do this manually. If you know how much you have coming in and how much you can afford to spend so you don’t run out of cash, it will be much easier to ensure you stick to a budget.
Cut out luxuries
If you always find yourself with a lack of cash at the end of the month, you may want to look at cutting down on some of your luxuries. For instance, if you are ordering takeaways as soon as you get paid, it might be cheaper to do a monthly shop and cook your meals instead. If it’s cheaper to take the train than drive to work, this might be another luxury you can do without. Even buying coffees every day can quite quickly add up. These may seem like little luxuries but they can end up costing a fortune throughout the year.
If you use a high interest account, make sure you can easily see how much you have gained throughout the year, as this can be a good way to keep you motivated and on track with your savings. Print it out and stick it up on a wall so you can easily look at it every day, as this will keep you on track.
Earn more than spend
In the same way as you need to burn more calories than you consume to lose weight – the same applies to managing your finances. You need to earn more than you spend to become financially secure and this is the mistake many people make, which is why so many people are in major debt these days. It is a simple fact, but if you don’t have the money – don’t spend. It might sound boring but the more careful you are with your money, the more you will have to spare.