Finance Spirit

Archive for December, 2009

Money affects everyone. Either you have too little, just enough, or so much that you let your money get lazy. Money gives us a feeling of self-worth, drives us to work harder, or provides the chance to relax and get away from it all. No matter what your opinion on the green stuff, it’s essential that you make organization of your finances one of your top priorities in life. Efficient personal finance doesn’t come easily for everyone. You have to plan to make the most of your money. Think about the future. Where do you want to be financially in five or ten years? Then, it’s time to decide how to get there.

Saving, consistently and wisely, is the first key of strong personal finance. Contrary to what some may believe saving money is hard work- a lot harder that filling jars with pocket change. The key to saving money for the future is consistency. It doesn’t matter how small of an amount of money you save from each paycheck, the key is that you are putting money away each week, two weeks or month, depending on how you get paid. If your employer already pays you through direct deposit, it’s even easier to save. Contact your accounting or HR department and change your direct deposit preferences to send a portion of your paycheck directly to a separate savings account, preferably one with a decent interest rate. If your employer doesn’t pay through direct deposit, as him or her if it might be possible to get this process started. This way you don’t even see them money and depending on the amount, you probably won’t miss it either. At the end of the first three months, you’ll be surprised at how much you’ve managed to put away without even trying.

Good organization is also important to personal finance. Create a system that helps you keep track of all of the money going out and all of the money going in. Start a spreadsheet on your home computer; create a monthly tally sheet in a notebook, whatever makes sense to you is the best system to use. You’ll be surprised at how much more restraint you’ll show when making purchases once you get in the habit of recording them all and watching the balance of available money decrease.

The move to University brings with it changes and new responsibilities. For many people it’s the first time in their life that they will have to look after themselves, and their finances. For this reason, it is recommended that you set out a monthly budget, listing you expected outgoings against your incomings. These four tips are designed to help you minimise your outgoings, leaving you more money to spend on the important things:

• Learn to cook and plan ahead with packed lunches: It’s far easier to grab a sandwich from the union food shop or canteen than it is to prepare something beforehand. However, snacks can start to add up – if you spend £4 three times a week on a quick lunch then you’ll be £48 down over the month. Try spending that money on a trip to the grocery shop or supermarket, and make packed lunches out of what you’ve bought. You’ll probably find you have some extra cash left over as well.

• Try to avoid store and credit cards: Store cards can look attractive, especially when they offer immediate savings on more expensive purchases. However, in reality the interest on these cards mean that they are often one of the most expensive ways to borrow money. Try and save up for that new games console or pair of jeans, rather than allow your treat to get you into debt. Also, try and put bigger buys off until the end of the term – that way you won’t regret making them when the money has run down.

• Pay your rent first: Your rent is one of your most important outgoings, so prioritise paying it. You will then be able to budget your remaining funds.

• Get your reading list sorted as early as possible: If you leave sorting out your reading list until you’re back at University then you could be forced to pay out for expensive text books that can be found at a fraction of the cost online. Ebay and Amazon both have a wide range of second-hand text books and, whilst it may take longer than a single trip to the bookshop, you should be able to fill your bookshelf for a fraction of the cost.