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Do you find it challenging to proactively drive your budget? Are you concerned about issues such as debt or financial liquidity? If so, you are not alone. Many consumers and businesses alike have yet to adopt the proper strategies. Let’s take a quick look at some professional tips and suggestions.
Staggered Payment Plans
Some of us prefer paying a rather large up-front price for a product or service. While this may appear to be sensible due to the fact that we will not have to be concerned about future obligations, such lump sums can place a tight budget under a significant amount of strain.
This is the main reason why a growing number of businesses are offering buy now, pay later alternatives to their customers. A series of more fiscally manageable payments represents one of the best ways to ensure that you bank account is not placed under additional strain. Furthermore, consumers will be made aware of their obligations in advance; enabling them to determine whether or not the purchase in question is worth the initial outlay.
Set Realistic Spending Limits
Were you aware that the average Scottish household is just over £3,500 pounds in debt (1)? This is why it is more important than ever before to carefully calculate your expenditures on a regular basis. Additionally, determine which costs are considered superfluous (such as a night out on the town) as well as those deemed necessary (utility bills are a prime example). Many consumers will be surprised to learn how much money they spend each month on expenses that are not entirely necessary.
Pay Attention to credit Scores
The majority of households and businesses rely upon credit cards. Although these are clever ways to make a purchase without the need to withdraw cash, they come attached with a potentially serious caveat. Individuals who overstretch their accounts will inevitably be laden with poor credit scores. This makes it much more difficult (if not impossible in some cases) to request a loan, to apply for a mortgage and even to open up a new bank account.
Simply stated, monitor your monthly credit limit and pay all bills on time. This will help to improve a flagging credit score and in the future, it can be much easier to obtain additional funds.
The Notion of an Emergency Fund
Many financial experts recommend placing a small amount of money aside each month into an account that can be accessed in the case of an emergency (2). Traditional savings accounts are a prime example, as these will likewise accrue interest on an annual basis. In the event that you suddenly require an influx of cash, you will not be forced into potentially dubious schemes (such as a payday loan).
Monitor Recurring Charges
Direct debit is a great way to automatically pay for services that are used on a regular basis. However, a problem may arise in the event that you are unaware of the associated financial obligations. There could also be times when a certain service (such as a subscription to an online portal that streams movies) has not been accessed in some time. In this case, you are literally throwing money out of the proverbial window. Eliminating redundant charges will provide you with an additional source of liquidity.
Efficiently driving a budget requires time and patience. Still, all of the suggestions outlined above will help to guarantee that you start off in the right direction. Feel free to bookmark this article for future reference or inspiration if desired.
Sources:
1. https://moneynerd.co.uk/average-debt-scotland/
2. https://www.fscb.com/blog/4-tips-for-building-an-emergency-fund-savings-account
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