It seems like the older you get, the more conversations revolve around pensions. There are the endless conversations about mortgages, mentions of a Financial Advisor, chats about maternity and paternity leave, bonuses, house deposits – the list seems to go on forever. However, this doesn’t have to be a bad thing.
Especially if you see it at as a way of sharing advice, tips and experiences that can really change your life if you put them into practice. If anything, this information can be the last kick you needed to fire a rocket up your bum and get you taking productive steps that will benefit your future. Check out the tips below to help you organise your finances.
Estimate Your Yearly Income
This is definitely not easy to do, but with enough practice, you’ll get to a place where you can roughly estimate your yearly income. This might not be possible for you at the moment, but if you look at your earnings from the previous years and try to identify any patterns, this can be helpful in creating an estimate of your earnings for the next year. This is not the time to set yourself a new challenge: be realistic!
Save Some Money for Your Bills
One of the things you can actually get a pretty good estimation of, is how much money you need for your mortgage and rent and other bills that keep coming back every month. Exactly how you pay this into whatever account you have for that purpose, will depend on how you get paid. As long as you actually set the money aside – instead of, say, splurging to your heart’s content during the latest Net-a-Porter sale.
Set Aside Money for Your Taxes
We’re talking about another cost that you can estimate just as easily as what you earn – so you have no excuses here! If you find a good accountant, he or she can help you monitor what your tax return will look like at the end of the financial year, so you make sure you’re putting your personal tax liability aside as you earn.
Whenever you get paid, you can quickly do a maths sum and put a percentage of this cheque into a savings account (which is ideally where you pay your tax from). This is money you don’t touch for the rest of the year. You will make things a lot easier for yourself if you have a seperate account to put this money in, so you have no complication when the tax bill comes for you.
Put Money Aside for Savings
When you’ve put aside some money for your monthly bills and tax, it’s time to set another part aside for your savings. This number will be different for everyone. If you’re saving for a house, you’ll probably be setting a larger amount aside every month. It’s a good idea to speak to a Financial Advisor, who will be able to provide suggestions about what’s best for you, your money flow and personal goals.
Now the fun part. The money that’s left over is the part that you can pay into another account – the one that supports your daily coffee habit, travel, health stuff, clothing, etc.
You can use different apps to keep track of your spending habits, which can help you to make wiser decisions and budget more. If you find there’s anything left over at the end of the month, you can send this straight to your savings account as a little extra and congratulate yourself on the fact that you’re officially adulting.