Money is a huge part of our lives. It can in part dictate the choices we can make both now and in the future. Be aware of your money and these 5 things that you’re doing with it.
1. How much you earn
Know how much you earn. Even if you don’t struggle to get to the end of the month you should always know exactly what’s coming into your account and when.
Knowledge is power after all. By being aware of exactly what you income is, you will be better placed to make long term financial goals like budgets, and saving and investment plans.
2. How much you spend
You should always know how much money you have in your bank account at any given time, and be aware of any and all outgoings; no matter how small. Whilst this can seem a daunting amount of data to keep track of, downloading a smart app that links to your bank account can make your life easier.
By tracking all your spending data you can build a comprehensive long term picture of your spending habits, and gain a fuller understanding of where there is space within your budget to make changes, or savings. It gives you back a level of agency over your financial situation.
3. How much you owe
Debt can be damaging and overwhelming. However, it's always important to know exactly how much you owe, to whom, and what type of debt it is. Knowing the difference between good debt and bad debt can help you structure which debts you need to clear first, and which can tackled over time. As a rule of thumb, the higher the interest on a debt payment the faster you should pay it back.
Everything is easier with a plan, and if you feel you can’t do it yourself, then there are experts who will assist you in creating a Debt Management Plan.
4. How much you save
It’s easy to convince yourself that you are good saver, only to arrive at the end of the year with a savings balance that's no larger than it was when you started. Between last minute holidays abroad, unexpected bills, and debt payment, it’s easy to lose track on what you've successfully managed to put away.
The best way to tackle this is to automate your savings. Set up customised savings Steps that help you save money according to your current spending habits, and make sure that this happens on a weekly basis. By making your saving automatic you remove the burden of having to remember to transfer your moeny, and instead save organically over time in a way that suits your lifestyle and is easy to manage.
5. How much you invest
Investing can feel liek a big step, but it doesn't have to be. If you feel that you don't have enough capital to put large amounts of money into an investment product, then start small instead.
From only £10 you can choose to invest in a range of products that not only reflect your values, but which allow you to set up a recurring investment Step; meaning that each week you can assign a certain amount of money to be invested automatically from your digital savings account.
Whilst no investment is guaranteed, investing can be a good way to ensure your finances grow above the rate of inflation. By keeping track of how much you invest you will be able to monitor the growth of your wealth and make the appropriate investment decisions for your financial situation.
Your capital is at risk, and past performance may not be a reliable indicator of future results. Oval Money is not permitted to provide financial advice, and if you have any questions please consult an expert.