Managing your financial commitments can be a bit like juggling elephants…you know what they are, roughly when they’re going to land, but if you don’t catch them at the right time they might just squash you!
Financial commitments go beyond the things you have to pay, like your rent and bills. It also covers the things you chose to spend money on like your phone bill or gym membership.
Here are our top tips on how to manage your financial commitments or juggling elephants as I like to think of it. It’s all about timing and being organised
1. It’s all about timing and being organised
Part of budgeting is about being in control of your money and you can only do that if you know when you will receive money into your bank account, but also when you have to pay your bills. This is how you can begin to manage your cashflow.
Everyone is different in the way they stay organised and stop those elephants from squashing them. Some will keep a financial diary of when things are due to go out or be renewed, some keep lists, others like spreadsheets (personally I love a spreadsheet); at the heart of this though it is an overview of the next couple of months/maybe a year to be aware of actions you need to take to stay in financial control.
Whatever your preferred method, by having this type of overview you can continually be looking for how to make your money work for you and ensure that you are only paying for things that you actually use.
2. Review your financial commitments
Just because you pay something regularly doesn’t mean to still need it (or even know what it’s for!). So reviewing what leaves your bank account is something we should all do. It’s a bit like a spring clean. Who hasn’t signed up to a gym membership with good intentions and then Netflix get’s in the way and that one introduction session ends up costing you a year’s gym subscriptions?! No, just me?!! Ok, moving swiftly on…
These days we all get offers like free Amazon prime for 6 months, but we forget when the 6 months finish and then, whoops!, we’ve paid for a years subscription without actually doing anything. But companies offer these free periods to entice you in and then they rely on the fact that lots of us find it difficult to remember to end subscriptions and they then make money for nothing. So, to help yourself:
- Review your bank account.
- Is there anything you’re paying for that you don’t know what it is?
- Is there anything that you’re paying for that you don’t use?
- For any commitments you have, find out when the commitment period ends.
- You may have signed up to a financial agreement and it may mean you are locked into this for a specific period of time. Eg, your mobile phone contract will often be for a fixed term period. Find out when you could review, renew or cancel this service.
- If you’re not sure contact the provider and they will tell you.
- Make a note of any end dates and set yourself reminders to review it.
3. Renewals and meerkats
We’re all guilty at times of not being on top of things and managing your financial subscriptions is definitely one area that can be easily overlooked; particularly when you may have quite a few to manage.
If you have signed up to a subscription or a service that you do use, it’s worth considering if you can find it cheaper. We’ve all shared Netflix log in details (just makes financial sense!) but could you get a cheaper mobile phone contract when it’s time for renewal? Could you get cheaper gym membership?
Comparison sites can help you with some services as, once you’ve used them, they often send helpful reminders to renew and this is your prompt to rethink what you pay for services. Comparison sites help try to find the best deals available on a wide range of financial products. From mobile phone deals to car insurance, from travel insurance to the best student bank accounts, from gas and electric deals to mortgage deals. Ok, so most of you won’t be thinking about mortgages just yet, but the principle is the same: If you need help to find the best financial deals available there are websites that can help you. You don’t have to be a meerkat yourself.
If you are looking for information on financial deals then a good place to start would be Money Saving Expert.
By combining knowing when your financial agreements are due to be renewed and using comparison sites at this time, you can continually maintain the best deal for you and make sure your money is well spent.
If you’re not convinced pick one of your outgoings and just have a look; you might be surprised how much you could save!
Looking at your outgoings in isolation won’t solve a money problem. You also have to look at your income and this means looking at your budget and balancing what you have coming in against what you have going out.
At certain times of the year you will be juggling those elephants nicely, but at other times you may feel they are just about to come crashing in on you. This is when you will need to reassess what you can afford to pay for.
When you look at your budget you can separate your spending into priority and non-priority costs.
Priority expenses are those that carry the most serious consequences if you were to not pay them. So this would include:
- Utility bills (Gas, Electric, Water)
- TV licence
- Food costs
Everything else could be considered non-priority but there may still be consequences for not paying things on time, or not at all, and it is important to know what these may be. That being said, everyone is different and what may be relatively unimportant to one, could be a priority to another. For example, travel may be essential if you have to travel to get to and from work. So everyone’s situation is different.
For more information about budgeting read our blog (the one released on Monday). This can help you consider what your priorities are and how to plan for these. With an overview of all your financial commitments you will be able to see where you may have financial difficulties and if perhaps you have to rethink some of your commitments.
5. Your financial footprint
How you manage your money and meet your financial commitments is all recorded on your credit history and this helps financial companies decide if they will offer you services.
It may not be something that has a massive impact on you now but maintaining a good credit history by paying bills on time and not going over agreed limits, like your overdraft, can help you once you have finished university and in the future as your credit history covers a period of 6 years.
Where to go for help
Even with all the best spreadsheet and financial forecasting, your financial commitments can still get on top of you. If you are struggling to get control of your money, or can foresee that you will struggle financially, then please contact the Advice and Money Team before you have been squashed by the elephants. We can help you review your budget and commitments and suggest ways to help improve your financial situation. We are here to help.
For more tips on how to manage your money follow StudentlifeCU on Facebook and Twitter.
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