How to get your personal finances in order

How to get your personal finances in order. Personal finance management is not anymore for analysts. Nowadays anyone with access to internet can easily calculate their spendings, pension schemes and estimate earnings from savings accounts.

How to get your personal finances in order
image source: pexels

 

Over the past few months, our lives have changed quite drastically. We like it or not, actual circumstances have forced us to reconsider our priorities. Despite the fact that lockdown has started to ease off in some parts of the world, many people are still struggling financial.

In this article, I put together a few resources to help you make the best out of your finances during this uncertain period.

After dealing with mental health, personal finance is the second problem that people have to deal with during lockdown. A study made by bankrate.com revealed that only 4 in 10 Americans have savings that they rely on in case of an emergency. 

 

 

 

 

 

It would be really helpful if we were taught in the school how to manage our money; sadly, we either have to learn by ourselves from various sources, or we can get help from financial advisors such as letsmakeaplan.org

First of all, let’s see what personal finance is and what implies

Personal finance is the management of the money that you make and spend. Managing your personal finances to create financial stability, which means you have a house to live, you have a budget to feed yourself and your family, but also, you can afford to pay for necessities, utility bills, taxes and save for retirement.

Personal finance is more like a discipline

Keeping your personal finance in order will allow you to live a stress-free life, knowing that everything is in order, just as it should be.

On the other side, there are people whose personal finance skills are not the best. While some individuals try to keep everything on track, because of financial pressure, they tend to make the wrong decisions, or sometimes skip important facts that could save them money on utility bills, credit cards, groceries and even rent or mortgage.

When it comes to budgeting, you need to be frugal. Making some changing in your lifestyle is the first step towards your financial stability.

Before you commit to getting your finances in order, you need to know how much income you have every month and how much you spend (total expenses).

Setting yourself this target provides you with a structure which you can plan around and find solutions to cut down the expenses.

1. Step one – calculate your income and outgoings

When you know exactly how much you get paid every month, or what’s the amount of money you contracted, the process will be easier to calculate where your money goes.

Take advantage of online tools that help you calculate your family budget easily, just by typing a few digits. The table below will show you exactly how to calculate your budget every month.

You can head over to online calculator to estimate your family budget in less than a minute.

 tools that help you calculate your family budget easily

2. Stay away from online shopping

Cutting down online shopping plays an important part in getting your important tips to improve your finances in 2020. We all live with basic stuff right now and fashion items, shoes and bags are not exactly a real necessity right, giving the actual circumstances.

Unsubscribe from all newsletters to avoid the temptation to spend and avoid social media where you get targeted with very specific ads which tend to provoke you to spend your money.

3. Get rather of debt as soon as possible

Before you decide to save and get your finances back on track, I suggest to pay off your debt first. Debt is the one that holds you from becoming financial organised.

Another reason to pay off your debt is to avoid high-interest fees, money which can be directed towards a saving account or some form of investment.

It might be tempted to choose a minimum payment for each debt; by doing so, you will never be free of debt because that’s what lenders want. Lenders are making their money from the interest that you are paying every month.

 

 

 

 

This article from cnbs.com explains that the avalanche method is proved to be the most effective way to eliminate debt. You have even online tools to help you calculate debt repayment.

This is how the Avalanche Method works:

Write down all your debts, calculate which one has the highest interest and pay the minimum balance for each one of them, then whatever extra money you have you should add them towards the debt with the highest interest.

There are cases when you cannot keep up repayment and that’s totally fine because many creditors are willing to negotiate. Phone each debt company and ask for advice and what sort of options they have for you.

4. Cut down on bad habits/ addictions

Bad habits/addictions will drain your bank account faster than you think. Things like, alcohol, drugs, cigarettes, gambling are the reason why your finances suffer. It might not be easy to get rather with addictions, but at least you can try and get help if will make it easier for you.

You probably don’t realize how much money you spend on bad habits, but even quitting a single addiction can save you at least $50 a month. Adding that each month, at the end of each year you save $600. That’s a lot of money which can be invested wisely.

5. Stick with a weekly shopping trip

Stick with a weekly shopping trip
image source: canva

I have always been living frugal and going shopping with a list in my hand helped me buy only what I need. Since the lockdown has started, I even started to become tighter with my money. I choose to buy my groceries once a week, from stores like Aldi, Lidl and even Sainsbury’s sometimes, but only if I cannot find a product on the other stores.

Use cashback cards every time you do shopping. Choose stores where food is cheaper, especially canned food, buy in bulk as much as you can and never go shopping when you hungry. I learned this after I had a few bursts when I filled the shopping cart with unnecessary stuff.

When you hungry your instinct is to buy as much as possible. Here I’d like to quote my partner when he says to me “your eyes are bigger than your tummy”. When you are hungry, you simply don’t think clearly, that’s why is best to eat before you go for weekly shopping.

6. Create a weekly meal plan

 Create a weekly meal plan
image source: canva

Planning your weekly meals is one thing that many people don’t want to follow. During the lockdown and even before, I took the decision to plan what I will eat for at least one week ahead.

Is obvious that cooking at home saves you an incredible amount of money, monitor your diet better, besides, you live healthier.

If you’re missing McDonald’s burgers and chicken sandwich, you can buy frozen ones from any supermarket, stick them in the oven and voila. The total cost for two homemade burgers cost me less than $2 compared with $12 -$14 for when I was buying from McDonald’s.

Avoid ordering food at home and buy take-aways only if is absolutely necessary.

Any leftover fruits and vegetables can be packed in small bags and stored in the freezer ( if you go shopping after 8 pm, some supermarkets are selling vegetables and fruits at a reduced price, you can buy in bulk and store them in the freezer, following this procedure, it will save you quite a big chunk of money).

 7. Review and eliminate unnecessary subscriptions

Subscription business model is very common these days. During the lockdown, you should review your credit card accounts and eliminate services what you don’t use. You can subscribe back to services when your finances are in a better position.

Here is a list with some of the most common subscriptions you might have and which you might not need right now:

  • Meal delivery subscriptions
  • Gym memberships (you can find online free sources of information to keep your workout on track)
  • Magazine subscriptions
  • Bear razors box subscription
  • Amazon and Netflix subscription services (do you really want to pay extra to watch movies? Why not use your time to read books instead and learn new skills)?
  • Review your mobile phone contracts and bill ( I had a nasty surprise ones, when I realize that a dodgy company was charging me $6 every month just because they were sending me a premium text. I enrolled in a competition and had no idea that I will be charged. If you see extra charges, investigate it immediately and fight to get your money back).

8. Renegotiate your household bills

If you don’t negotiate your household bills, you’re missing a lot. Many service providers are willing to work with their customers and offer better deals, especially if you were using their services for many years.

Phone bill: if you have a premium mobile phone plan, is better to switch to a basic one, since you cannot travel outside the country, you don’t need a special roaming plan.

Cable/internet bill: Every year my internet bill goes up, same as any other utilities. Chances are that if you call your internet provider and ask for better deals, is possible to slash a large portion of the bill just because you asked (babies doesn’t get fed until they cry).

Insurance: Renegotiate all insurance plans. From car, house, boiler, electronics, health insurance, you can get better deals if you research properly and telephone them and ask to speak with a manager. In this stormy period, you have to hold tight your money and insurance is taking a large portion of your monthly/annual income.

 Utility bills:  Here is included gas, electricity, water and council tax. All these services are critical and everyone needs them.

 

 

 

 

Whether you have an outstanding bill or you cannot afford to pay all at once, make a phone call and speak with customer service to see how they can help. If they cannot offer you a discount, at least you should arrange a monthly plan to pay your bills over a few months period.

For example, in the winter gas bill is higher compared with summer, therefore, make a monthly instalment to pay your winter bills during the summer; this process can be applied for the rest of utilities.

9. Start a side hustle

Start a side hustle during lockdown
image source: unsplash

Relying on a single source of income should sound an alarm straight away. The future is very uncertain; therefore, a side hustle can save you financially if it happens to become unemployed.

A few ideas to create another income stream are:

  • Selling unwanted items on eBay, Facebook marketplace
  • Make and sell crafts such as body scrubs, soap bars, jewellery, canvas. List your handmade creations on Etsy, Notonhighstreet.com, nuMonday.com and a few other platforms
  • Start a YouTube channel ( you won’t earn a huge amount of money from Google ads, but even $5-$10 a month will add up) Just like dividends
  •  Start a blog and apply for ad networks, or even buy a successful blog that already generates revenue
  • Get paid to refer people for CPA ( cost per action) networks or affiliate programs

Read this article for some of the best passive income business ideas

Be sharp and create multiple streams of income, if one fails, you’ll have others to back you up.

10. Avoid withdrawing cash

Unless you really need cash, you should pay with your cards for services and shopping. Some banks charge a commission every time you withdraw cash. Avoid any extra charges and always use cash machines from the bank you have your card issued from.

11. Keep a track on all receipts

Make a habit to keep a track on everything you spend, ask receipts from stores and review all of them at the end of each month. You can use a mobile app also to track your spending and calculate the total amount for each month.

This sort of personal finance habit will help you manage your money when you need to apply for a mortgage also. The more you know about your spending the better you can save and create a comfortable life for yourself.

12. Use all cashback points right now

Review all cashback cards and use the points before companies might change their terms. Supermarket points cards, pharmacies, petrol cashback, bring all of them out and use the points next time you need to buy something.

I had a few times when I bought beauty products from our local pharmacy Boots with the points I accumulated. Usually, I do this at Christmas when I buy presents for family and friends, but as things changes, we need to adapt.

 13. Choose a more competitive saving account

If you have savings and don’t earn enough interest, is time to search the market and put your money to work for you. At the moment very few banks will offer high interest on a savings account, but even 1% is better than nothing.

Use this calculator to simulate your investment earning based on a few factors determined by your deposit, annual rates, inflation and how many years you plan to save.

14. Review your savings and retirement schemes

Every year you should review your pension schemes. Whether you have a state pension or a private pension, now is a better time to review what’s going into your retirement pot.

If your finances have been badly affected, you can contact a financial advisor to get the best solutions for your pension schemes. Other than state pension, I prefer to rely mainly on the properties that I own, and maybe I will add some more in portfolio by the time I reach my retirement.

I ditched my private pension scheme ages ago and I decided that what I got in my hand is safer, besides I can access the money from properties whenever I want or need.

 

 

 

 

Is not easy to get into real estate, but I was lucky enough to save since early age and with a few strategies I bought some cheap properties which I renovate them myself, with my own hands and my family help too.

When I look back now, I still cannot believe how much I achieved and how much I worked to be where I am.

If you can get on the property ladder, I suggest to be serious and hold on to what you got. Buy an old cheap property rather than new newly build one and get your hands dirty; renovate it yourself. If you choose to go this way, you will save a lot of money, and you will gain experience for the next project.

15. Learn new skills

Learning new skills, it won’t necessarily help to save money but will allow to get a better-paid job in the future. Online courses are very handy and you can study at your own pace. What skills should you want to learn is entirely up to you, based on your passions and what you see yourself doing in the future.

A few good courses you can study online are finance, how to build self-confidence, communication, or why not learn a new language.

A few trusted sources to find online courses are:

Udemy

Reed.com

https://onlinecourses.lse.ac.uk/

16. Keep a positive mind and stay confident

When life throws at you all sort of problems, you should carefully consider what percentage of your mind is directed towards positive and negative thoughts. Sometimes you attract what you think.

Another interesting thing that I always do and I advise everyone, is to see the other half of the glass. Every bad situation has got a good side. Look into that one and focus on the good things that you want to happen in your life.

 

 

 

 

Practice meditation and repeat positive mantras, a fact that will channel the energy to reach your goals and live a better life.

A few factors that will help you become better at managing your finances are:

  • Stop procrastinating
  • Quit bad habits/addictions
  • Don’t blame others for your choices
  • Read finance and money management books
  • Encourage and help others succeed

All these money management methods won’t work if you don’t follow them every month

In the end, I would love to point that, living a frugal life is not easy at all; we all want to enjoy all sort of luxury, but you have to ask yourself, what do you do to make that happen?

Learn from people better than you, eventually find a coach to accelerate the process of learning. Life is a long journey in which we constantly learn and evolve.

Let’s recap:

How to get your personal finances in order

1.Step one – calculate your income and outgoings

 2. Stay away from online shopping

3. Get rather of debt as soon as possible

4. Cut down on bad habits/ addictions

5. Stick with a weekly shopping 

6. Create a weekly meal plan

7. Review and eliminate unnecessary subscriptions

8. Renegotiate your household bills

9. Start a side hustle

10.Avoid withdrawing cash

11. Keep a track on all receipts

12. Use all cashback points right now

13. Choose a more competitive saving account

14. Review your savings and retirement schemes

15. Learn new skills

16. Keep a positive mind and stay confident

If you enjoy reading this article, share it with your friends and if you have other personal finance tips, please share it in a comment below.

 

Guide to get your personal finance in order and save money during lockdown.

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50 Responses

  1. callansmama says:

    These arenawesome tips especially review unnecessary subscriptions. Thanks!

  2. CA says:

    This post is so timely as I am also doing my very best to work on financial management. Good thing that I am not into online shopping. I prefer seeing actual items before buying them. And I so agree with not depending on only one income stream.

  3. Been doing this, since I need to save much for my brother’s college. And In times of unexpected happenings, like this pandemic, saved money will be used. This reminders and notes of yours must be followed by everyone.

  4. really great tips!
    I think they should teach the basics of personal finance in schools!

  5. These are some good tips for the ones that have no financial background and are not able to manage their money responsibly

  6. blair villanueva says:

    I learned managing my personal finances since grade school, thanks for my Mother who taught us how to be thrifty. Now that I am here in Australia, I carry that legacy. I shop on opshops, do upcycling, and only gets brand new items from partnered brands!

  7. That’s why it’s really important to teach kids personal finance management as early as possible so that at the very young age, they already know how to hold and value money. Old habits die hard. Those who weren’t taught about this always fall into debt and more debt… Thanks for these tips though. 🙂

  8. I think, budgeting and saving is the key towards financial freedom.

  9. Harman says:

    If i start avoiding online shopping, i know I’ll be a millionaire 😹🤥 but the question is HOW?

  10. Chantal Gray says:

    I am blown away with your tips. You are so detail and gave a lot of useful resources for it. I was bad with finances but I am learning slowly and getting there. I am learning to budget more. An awesome read!!!!🤗

  11. Louise Smith says:

    These are all great tips for getting your personal finances in order. Mine were shocking for a while after the breakup of my relationship, but I’m happy to report that things are much better now and I already follow a lot of the tips in your post 🙂

    Louise x

  12. Kenny Ngo says:

    Badly needed this. We have been hit hard by the pandemic.

  13. World of Faz says:

    This is something I really need to start doing. I think if i get this right I willbe able to gain more out of my life and ease of the mind.

  14. Perfect tips for times these days. I feel like I’m spending more at home than I ever did when I was able to go places!

  15. Stephbwalya says:

    Thank you for these amazing tips.
    I don’t do online shopping no matter what, unless it planned for it for a long time.
    And yes times have become hard so a side hustle is necessary.

  16. brianmayroam says:

    Being a local tour guide was a fun side hustle until the virus hit and shut down much of New York.

  17. Lavern Moore says:

    This is a great article for helping to get my finances in order I really love to have someone with your background to help me out is that possible?

  18. These are all really great points!

  19. Rachel Lynn says:

    It is SOO important to get your personal finances in order. I moved to NYC as a waitress and would never have been able to make that move without a strict budget and financial planning ahead of time. Definitely sad we don’t teach this in school – it’s such an important life lesson.

  20. Elizabeth O says:

    Sadly, the pandemic has hurt those who live paycheck to paycheck the hardest. Your tips are helpful but for the working poor and those on the margins it is little comfort.

  21. Valerie says:

    Very important tips here! Great post 🙂

  22. GF Veg says:

    Thanks for these tips! A couple of these I already do well on – like weekly grocery shopping and doing a weekly meal plan. Many others I still need to work on though – like mindset and managing my online shopping. This is a great list and I will keep it in mind! Thanks again.

  23. Kait says:

    These are really great tips! I was happy to see that I am already doing a few of these things, but I can do more – like managing some of my subscriptions!

  24. Hallie Sayre says:

    Amazing tips. I have applied a lot of these to my personal finances and it has transformed how I do things!

  25. Amrita says:

    Some important ways to keep personal finances in order. Having an emergency fund helps me stay stress free

  26. Cristina Petrini says:

    I admit that I am a very orderly and precise person to the point that I manage the finances at home!

  27. Shay says:

    A healthy financial relationship is super important especially now with so much uncertainty. This was helpful

  28. caressa walker says:

    More than a weekly shopping trip is the death of me. I go all the time and It really makes things worse. I need to plan out my meals better.

  29. Nishtha says:

    Great informational post! We can all follow these tips to be financially literate and independent.

  30. Puja Kumari says:

    The perfect financial guidance I need to manage my personal finances. I follow the same strategy of not withdrawing cash until needed and weekly meal pla.

  31. Tana says:

    I had never heard of the avalanche method before. This is some really sound advice!

  32. Clea says:

    Many people are negglecting the power of having a plan on budgeting.. hope this will reach some people who needs this! This is a great reminder to all. Thank you

  33. I really needed to read this one , thanks

  34. Sarah says:

    These are great suggestions that I think everyone should follow. I know when we were trying to get out of debt we did most of these, especially canceling any monthly subscriptions that were just not need!

  35. Wow, thanks for the amazing you have provided above, they are really great to help one financially

  36. So many great ways to save money I really need to forward this our cousin and sister in law they both new financial guidance and your steps are easy to follow.

  37. Michelle says:

    These are great tips! I stick to the meal plan, but my guilty pleasure is online shopping. It is very dangerous, with a click of a button. Thanks for the great tips! Will unreported these in mind as I’m working towards my debt.

  38. Cathy says:

    Great useful tips! Knowing is not enough, applying the concept to our daily life is more important. Learn to save money, spend less, eliminate unnecessary debt, and make retirement plan. As Warren Buffett to tell that if you don’t find a way to make money while you sleep, you will work until you die.

  39. Olufunke Kolapo says:

    These are really great tips. Starting a side hustle and learning new things are the new things for me.

  40. I love how extensive this list is. Not shopping when you’re hungry and staying away from online shopping totally resonated with me as things that I need to improve on. And yes, making your own food instead of eating out makes a huge difference! Thanks for sharing, this was super informative and helpful!

  41. Sarah Larson says:

    These are such awesome tips! Thanks so much for sharing!

  42. Wow this is an amazing and thorough guide! I’ll be sure to share with friends and family! Something that’s really helped me is to automate our savings with apps like Albert and through our Ally Savings account. It makes a huge difference! Thanks for sharing 😄

  43. Puja Kumari says:

    Thank you for sharing so many ways to save money. I really need them.

  44. Jenn Kalchik says:

    This is super helpful! I’ve gotten into the habit of checking my bank account every other day so I’m not caught by surprise.

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