The news looks ominous. The Canadian central bank has raised interest rates to their highest figure in 14 years, and many of us are starting to see the real-world impact of rising inflation. While none of us can sort out the world economy, there is plenty of action we can take at home to protect our finances. This guide will show you how to be smart with money using six simple tips.
1. Create Financial Goals
Many articles will tell you to create a spending budget. But effective financial management goes beyond budgeting and helps you focus on money more holistically. That starts with goals.
Writing a money goal will help you focus on what you want to achieve and how you intend to get there. For example, you might have a goal of saving money as a deposit for a house.
It’s essential to set a deadline as well as a monetary figure for your goal.
When you know what you want to do and it becomes far easier to create a budget, you can set smaller targets for what you intend to save each month.
And if you struggle to hit your target, you could also look at small side hustles you can do to help you reach that goal. Even a tiny money maker like a yard sale could be all you need.
2. Consolidate Your Credit Card Debt
Is your wallet bulging at the seams from stacks of credit and store cards you’ve acquired over the years? Now is the time to get those debts in order.
Having multiple debts over numerous credit cards is a financial risk because managing your money is challenging. Can you recall your monthly minimum payment for each of those cards? Probably not.
So that’s the first argument for consolidating your credit card debts by taking out a loan. It will give you a single payment to remember each month, and as that is a fixed payment, it will help you manage your monthly outgoings.
Another reason consolidation is beneficial is because you’ll often have the chance to shop around for a cheaper rate than what you currently pay on your most expensive credit cards.
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3. Consider Investing
Perhaps you are in the enviable position of having money in a savings account. But is your money working as hard as possible for you?
Consider a more aggressive investment strategy if you have savings and don’t need that cash for the foreseeable future. That means investing your money in something with a higher risk but one that offers a higher return.
You might consider investing in shares or perhaps dabbling in cryptocurrency trading. You don’t have to be a financial expert in investing your money if you aren’t confident about making the trades personally.
There are lots of managed investment products on the market.
Another investment option that could be a smart idea is to top up your pension pot with extra cash. That’s an excellent way to manage your money because the longer that cash remains in your pension, the greater chance it has to grow in value. And having some financial peace of mind about your pension means you can take a more relaxed approach to day-to-day spending.
4. Use a Money App
One of the biggest hurdles to sound financial management is monitoring your daily spending.
Thankfully, technology offers some solutions. And this tip is also ideal if you are one of these people who struggles to remember the passwords for all their bank accounts.
Money apps allow you to link and view all your accounts on one dashboard. That means you can see your spending, income, and any debts you repay at a glance.
If you download an app, get into the habit of checking it daily. That will help you spot problems early before they become a financial headache.
And carve out half an hour each month to review your numbers, monitor your spending, and determine whether you have met your financial goals.
A monthly review will help you tweak your finances if you’re regularly spending money on expenses you didn’t anticipate.
5. Shop Around for Offers
Most of us give little thought to the monthly outgoings in our bank account. Of course, we have to pay our utility and phone bills! So why worry about them?
There is a reason to review ongoing expenses, asking whether you are paying more than you should.
If you’ve had an account with a company for a long time, you might find you can get a cheaper deal elsewhere. Do regular checks on comparison sites to see if you are paying too much.
If you love the company you are with, you could call their sales team and explain that you’ll need to switch if they can’t reduce your bill. Some companies will offer you a discount if they think you might move to a competitor.
6. Check Your Credit Score
Good financial management is also about having a clear grasp of your debt. The best way to do that is by checking your current credit score.
A credit score tells you how reliable you are at paying debts. You probably have a good credit score if you consistently pay the balance on your credit cards each month and spend less than your monthly income.
If you’ve ever paid a bill late or defaulted on a debt, you might find your credit rating needs some work. Your first step is to order your report and take it from there.
How To Be Smart With Money
You might assume that learning how to be smart with money is all about spending less. But while controlling your spending is essential, it isn’t the only route to savvy money management. Start using these six personal finance tips today.
Why not check out our fast-track loans to see if they can help you get your money situation in order? You can start your application right here.
