All of us tend to have some kind of financial goal that we are striving to meet. For some, this is to buy their first home, while others might be saving for a wedding or a big holiday.
Whatever you’re working towards, here are three simple tips to help you manage your money more effectively and meet your financial goals.
One of the best ways to meet your financial goals is to save money. A savings account is essential, not only for people who want to save for a particular goal but also to be used towards a rainy day fund. Saving money aside each month means that if any unexpected payments arise such as costly home repairs, you can easily dip into your savings if need be.
If you want to keep a savings account for your more serious financial goals, and a separate one that you can dip in and out of, consider saving some of your cash into an ISA. A different range of ISA’s are available which are designed to help you with your particular goals, such as a Help To Buy ISA which focuses on helping people buy their first home.
For your additional savings account, create a ‘rainy day’ fund which you can use in emergency situations. Ideally, you should try and fill your savings account with enough money to cover three months of rent and other bills. This way, if you lose your job unexpectedly, you’ll have something to fall back on and get you through while looking for new employment.
Budgeting can be hard, but it’s often an essential step towards meeting your financial goals. Without budgeting, you might find that you quickly run out of money each month and have to take cash out of your savings accounts.
While this is sometimes unavoidable, it’s counteractive to keep saving money only to take it back out again. One of the most effective ways to set a budget for your money is to use the 50/30/20 rule.
This rule requires you to split your monthly income into three categories — fifty percent is ‘needs’, thirty percent is ‘wants’, and twenty percent goes into savings.
Your ‘needs’ means any outgoings that are necessary such as food, rent, and bills, while ‘wants’ is the money you can spend each month on treats and things you want to buy but don’t exactly need. Sticking to this rule each month is a great way to organize your money and keep track of what you’re spending, while also having some cash left over to save.
Saving is a great way to work towards meeting your goals, but the reality is that this can only go so far. The more money you have entering your account each month, the more money you will be able to save and meet your financial goals more quickly. If you want to borrow money to grow your investment make sure the interest rate on a personal loan is low.
If you feel ready to take the leap into property investment, consider the best areas to make the investment based on the potential rental yields and capital appreciation. Cities in the UK like Liverpool and Manchester currently hold the top spot for property investment, with companies like RW Invest enticing investors with opportunities that bring impressive rental yields, high levels of demand, and strong capital growth.