Top Tips To Managing Your Money

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The news has just come in and even more people have just lost their jobs at one of the larger entertainment companies in the UK. While the recession definitely seems to be behind us and things are improving, companies are still dragging themselves back up, dusting themselves off and trying to make money again before being forced to close their doors.

What have we learned from the recent recession? The one thing I learned is how important it is to manage your money because you never know when things will go wrong.

Last year when the recession was really bad my partner lost his job and was unemployed for around four months; this was the hardest four months where we scraped every penny to pay bills and make sure we didn’t lose our home.

I started thinking of ways to improve our financial situation, ways we probably could have managed our money better in the past and changes we had to make to our lives to make sure that if he lost his job again, we wouldn’t end up with late payment penalty notices against our name and our credit report being worth absolutely nothing.

Can You Be 100% Ready?

I’ve come to realise that no matter how much you try and prepare yourself for the worst, you are never 100% ready. But what you can do is make sure you have taken the necessary steps and that a setback of losing a job or an unexpected expense will not leave you in ruin.

The steps to take are easy and may even seem obvious, maybe you’ve thought of them and then decided against it; all you need when a loved one loses a job is to have enough money in the kitty to see you through until they are working again.

Pay Off Store and Credit Cards

The first thing we did when my partner went back to work was to pay off our credit and store cards. At the end of each month there isn’t only a mortgage to pay but a large sum of money which goes towards paying the minimum balances on these cards. Take these minimum payments out of the mix and then there is only the mortgage, a smaller amount to pay when only one of you are working.

Paying off the credit and store cards is actually easier than we thought, we were in the typical habit of paying the minimum payment each month, but when we put our minds to it, we could pay much more into each card each month and they were all paid up in full within a few months. You’ll be amazed how that affects your monthly budget; you have so little to pay each month, which leaves money for savings.

Open a Savings Account

Once you have paid off all your store and credit cards, open up a savings account where you can place all the money you were paying towards the cards into savings. Should you need emergency cash in a hurry the money is there for you. It doesn’t get better than this and you’ll be amazed how much peace of mind you enjoy knowing you have cash sitting in a separate account for those unexpected emergencies.

Desperate Measures

One of the things I found when we were down in the dumps was a short term loan which really helped us through some hard times. The advantage is that they are not long term loans as you pay them back on your next pay day and they just offer essential cash when you need it most.

Image courtesy of Grant Cochrane / FreeDigitalPhotos.net

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