If you don’t have control of your money, then it’s reasonable to conclude that you don’t have control of your life more broadly. If you make poor financial decisions, and end up burdened by debt, then you’ll end up working more – and using your time in ways that don’t improve your quality of life.
Getting a grip on personal finance should therefore be a priority for just about everyone. But what does this look like in practice?
Creating a Budget You Can Stick To
Budgeting is critical. You’ll want to compose one for your daily spending that tracks your personal goals. You might want to save for a deposit on a house, or for a particular major purchase, like a car. Once you have everything set down, you can make judgements about your day-to-day spending, and see whether it needs to be reigned in. You’ll also be able to more easily spot where your spending is getting out of control.
The Power of Compound Interest and Savings
One of the most powerful things about interest is the way that it compounds over time, leading to exponential growth. 1% interest every year might not sound like a lot, but this figure can effectively spiral over time, because of the interest that piles on top of the interest being earned.
The best way to save is usually the way that requires minimal effort and thought. Set up a system whereby you deposit a given amount into a savings account, and watch your investment grow over time.
Smart Investment Strategies for Beginners
If you’re new to investment, then it might be difficult to know how to proceed. You might be intimidated by terminology, and unable to distinguish between different investment vehicles, like stocks or bonds. What matters is that you understand how much risk you’re assuming, and that you have specific financial goals in mind.
This is where the input of an experienced, professional financial advisor can be invaluable. With their help, you’ll be able to make decisions that align with the objectives you set – and to avoid falling into traps.
Planning for Retirement Early
The more control you have of your financial life, the more money you’ll be able to accumulate, and the better able you’ll be to save for retirement. There are a number of specific investments that are optimised toward this goal. Consider a pension, employer contribution schemes, and ISAs. Each has its own particular benefits – but they’re all great for would-be retirees.