Individual Insurance

Want to Get on Top of Your Finances & Better Manage Your Money? Start Here

Managing money is more than just paying your bills and making ends meet. You don’t need to be a math wizard to stay on top of your finances, though. If you often wonder where your money goes or feel that you are not financially secured, here are some easy tips to help you better manage your money and improve your financial habits.

So, let’s start from the moment your income is credited to your account.

  1. Follow the Rule of Budgeting – 50/20/30

Rather than spending your income randomly, implement the 50/20/30 Rule for budgeting. It is quite simple as it allows you to split your income into three parts in a way that can help you reach your financial goals more easily.

According to this budget rule, you should allocate:

  • 50 percent of your income on essentials that you cannot avoid
  • 20 percent on your savings, insurance premium, and investments
  • 30 percent on personal expenses, such as travel, entertainment, and other items that are your personal choice and not necessary for living

Later, you can make some adjustments as your financial goals change over time.

  1. Create a Monthly Budget that You Can Follow

You need to create a realistic budget after analyzing your monthly spending habits and monthly in-hand pay. Don’t keep your budget too limited because that will make you feel like you are not living a life at all. For instance, if you are eating out four times in a week, telling yourself that you will never eat out is not going to work at all. So, determine your budget that works with your lifestyle while encouraging yourself to adopt better spending and lifestyle habits.

  1. Use AutoPay Feature for Paying Bills and Automating Your Savings

Paying bills on time keeps several issues at bay. So, if possible, use the AutoPay feature of your bank app or payment app to pay your monthly bills. It will help you avoid fees for missing a payment and also save your time. Besides, you can also automate your savings and investment account deposits to eliminate the issue of not saving up and keep things hassle-free. Many banks and apps also offer discounts to sign up for automatic payments and going paperless.

  1. Cut Down Recurring Payments for Services That You Don’t Use

Have you been paying for services that you don’t use in reality? Most people sign up for gym memberships that they don’t take advantage of, many premium channels they don’t watch, entertainment apps that don’t use regularly, and newspapers they don’t read. And the list goes on. If you are one of them, make a list of all such subscriptions and memberships and cancel them so that you can have more savings in your account.

  1. Review Your Bank Accounts, Investments, and Insurance Policies

If you have created your accounts in various banks and investment accounts under various custodians, you need to review and figure out a way to reduce their number. For most people, one checking and one savings account are more than enough.

Similarly, if you have several credit cards, it is better to reduce their number so that it becomes easier to track your spending habits and reduce possible penalties.

If you have invested in more schemes than you can manage, consult a financial advisor to reduce your paperwork and manage your finances better.

  1. Prefer Investing in Funds Rather Than Individual Stocks

Unless you trade on a daily basis or your sole income relies on day trading, it is better to think about investing in mutual funds or something with lower ownership costs. Think about your risk tolerance. Investment in a few funds rather than several individual stocks will also lead to lower tax preparation costs and save you from headaches.

  1. Use Cost-Effective Money Management Tools and Apps

You can easily find free and cheap money management software or apps that can simplify your budgeting, monitor your finances, and help you save and invest. When you can see a complete financial picture, you can make changes accordingly to manage your money and save more.

  1. Save Up Before You Make Significant Purchases

As long as you are not making a very huge investment, you should focus on saving your money first to finance purchases like a house, car etc. It will prevent you from paying interest and creating a debt for months or years to pay back. Meanwhile, the saved money sitting in your savings account will generate interest income as well.

  1. Create a Long Term Investment Strategy for You

With the help of a financial advisor, you can generate more income by investing in the right schemes even if your income is limited. So, if you haven’t invested yet, remember that time is one of the biggest factors that can compound your savings.

For many people, financial stress is the result of living outside their means. So, if you can’t find a way, evaluate your lifestyle, spending habits, and your attitude for managing money more closely and get professional assistance to become financially secure.

To know more about how to handle your financial stress and better manage your money and savings, please get in touch with us to speak to our financial experts in the UAE.