Money matters can be a major cause of stress, but there are lessons that you can learn that can help reduce associated anxiety. Here is a look at seven top tips.
Knowing how much money is going in and coming out is essential. You may not need accurate software for financial advisors just yet, but a simple program to help you keep track of your budget can be really helpful. Alternatively, just a good old-fashioned notebook and pen can do the trick.
Understanding Inflation and Bank Rates
Make sure that you are making the most of the money you do have by keeping abreast of inflation and bank rates, which can have a major effect on everything from how much your savings earn to how much you have to pay back on a loan or mortgage.
Savings Tax Rules
A financial adviser using software such as www.intelliflo.com could make understanding tax rules as easy as possible. You can also do your own research into tax rules applying to savings, for example. For more information about allowances, go to the government website: https://www.gov.uk/apply-tax-free-interest-on-savings.
Make Your Money Work
You need to ensure that any savings – and your finances as a whole – are working as hard as possible for you. Investing is not for everyone, but you might investigate it. If you do decide to go ahead, the sooner you organise things, the longer your investment has to grow.
Understanding Compound Interest
Compound interest isn’t an exciting subject, but the effects it can have on your savings can be huge. Basically, if you save £100, you will get interest on that amount but, with compound interest, next year you will get interest on the £100 plus the first amount of interest, and so on. If you have a savings account, your interest may be compounded daily, each month or quarterly, and then you will be earning interest on interest.
Plan for Your Retirement
Retirement may be a long time away but it is never too early to start planning and paying into some sort of pension scheme.
Know Your History
Understanding your credit score is vital. This will ensure that you are in the know about how financial providers view you and what products are available to you. It can also help you to repair a damaged credit score.