Being smart with money isn’t always about how much you make, or having some leftover after rent, bills, and other essentials. Sometimes, good money choices come from the way you spend any surplus money, or what you put it towards. By looking at your current habits and lifestyle, you may be able to find areas where money is not being spent appropriately. Rectifying this can help to put you in a better financial position than before, as well as allowing you to provide your children with a good role model in terms of money management.
Invest in ISAs
It can be tempting to spend whatever money you have once your basic needs are met, but this could lead to you being stuck in your current financial situation. Putting some of your spare change into the ISAs available here will allow you to sit back and watch those pounds grow. An ISA is an Individual Savings Account, where the interest you gain is completely tax-free. You can have a single ISA account each year, plus a lifetime ISA which can go towards buying your first home, or even your retirement. The current maximum amount that you can save, per tax year, is £20,000. Thinking about the future by saving money can also benefit you should an unexpected expense arise.
Curb Your Habits
While many people have their vices, these are often not good for the body, let alone the bank account. On average, it is expected that people living in the United Kingdom spend roughly £916 on alcohol every single year per household. Of course, these figures vary depending on household size, but the amount per person could easily be more. Likewise, spending money on cigarettes, or even takeaways, will also see you parting with your hard-earned cash for an unhealthy return. By identifying some of your more negative habits, as well as any trigger factors that relate to them, you may be able to pay close attention to how you spend your money, particularly after a bad day.
We can all be tempted by items that we see in shop windows, especially if we have extra money, or the item is on sale. Instead of buying an item immediately on a whim, which is also known as impulsive purchasing, you could instead opt to wait. By waiting, you will be able to figure out if the item is really essential, or even wanted. If a few days pass and you still have the same desire, then you may be able to proceed. Otherwise, you have just saved yourself that buyer’s guilt and kept your money in your pocket.
Making better money choices doesn’t mean you need to go without luxuries in life. By taking more care before handing over your debit card, you can stop yourself from spending unnecessarily, which can go a long way towards improving your physical, mental, and financial health in the process.
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