Improving your financial position, how to do it correctly
When you’re struggling for money, it’s easy to make rash decisions. And as the cost-of-living crisis continues to bite, it’s hardly surprising that families struggle to find the best ways to cope.
With soaring prices forcing over half of adults across Britain to spend more than usual on their food, some are cutting back on their own needs to focus on feeding their children. One in 20 adults admitted running out of food and being unable to afford more.
The rate of inflation is falling, but costs remain high. For those facing debt or trying to pay off an overdraft, prioritising might be harder than ever. Whether you’re trying to manage your own money or supporting someone else in difficulty, it’s always worth knowing how to improve your situation correctly.
Why is good financial health so important?
When it comes to personal finance, being on top of your game could benefit your life in multiple ways. The basic necessities, including covering costs for food and heating your home, should be covered without causing unnecessary stress or worsening your debt.
And when it comes to your health, your physical and emotional wellbeing will only improve when you have peace of mind about your money. Struggling with debt and money is never easy, but there’s always a way out if you’re finding it hard.
Many of the core principles behind money management come down to making the right decisions. Don’t panic and rush into taking another loan when alternative and more sustainable options could be available for you and your family.
Four ways you can improve your financial health
Here are four ways you can improve your financial health.
1) Track your spending
Firstly, keeping tabs on where your money goes is important. There are several ways to do this, but perhaps the easiest is by using online banking apps. You could receive real-time updates whenever you use your card, and you might also access detailed spending insights.
Many of these platforms also offer credit options and savings strategies too.
2) Prioritise handling debt
Getting back on track is important and could safeguard your financial health for the future. If you have manageable debt and you know you can afford to pay it off, there’s no need to worry.
But when you’re planning a major purchase like a new car, or moving from rented to mortgage, finding ways to build your credit history now could increase the range of options available. When you’re realistic with what you can afford to pay off, being able to handle debt will serve you well.
3) Set a budget – but be flexible
Setting a budget is easier said than done. At the very least, you should set a maximum spending budget and allow yourself to go over by a limited amount, if necessary.
This might sound contradictory, but allowing yourself some flexibility could come in handy when you face unexpected expenses like medical bills or fines. When you have an emergency fund, you can benefit from more peace of mind throughout each month.
4) Get the right advice
Lastly, if you’ve got yourself into a tricky position, it’s unlikely that you’ll be able to fix things alone. Getting in touch with a professional advisor, a trusted family member or even your local bank could help you make improvements faster than you’d expect.
Talking to someone else will help you to gain a fresh perspective on your situation. From there, you can start thinking about saving for the future and protecting your assets too. You might have a long way to go yet, but there’s always a good reason to stay positive.