10 Smart Money Moves that Could Help You to Better Manage Your Finances

Managing your finances correctly isn’t easy. Everyone’s financial picture is unique and there is no one-size-fits-all solution for good financial management. That’s why you should always consult a financial planner before you make any important financial decisions.

That being said, there are some basic money moves that often make good sense, and we’ve prepared a list of 10 of these below.

1. Open a Separate Savings Account

Good financial management usually involves making the most out of the funds available to you. Often, this will mean investing your savings in a portfolio to help guard against inflation and produce adequate returns.

However, building a solid investment portfolio is hard and often fraught with risk. It usually shouldn’t be attempted without the advice of a qualified financial professional as you could end up losing your savings all together on bad investments.

That being said, if you’re not already investing your cash, you probably should at least be putting it into a high-interest savings account. If you’re leaving it in your regular checking account, you could be leaving money on the table as it’s unlikely that you’re getting a good rate of interest.

It might be a good idea to explore different savings accounts and put your savings somewhere that offers at least a 1% annual return.

2. Stop Renting and Invest in Assets

Paying rent on things like your accommodation or vehicle might not be the smartest money move. This is because, once your rental payments stop, you don’t own anything at the end of it.

Instead, it may be a smarter decision to get a mortgage so that the money you spend is going towards your own assets. That way, once you reach retirement age, you’ll hopefully have already paid off things like your car and your house, which will reduce your monthly expenditure.

3. Create an Effective Financial Plan

It’s often advisable to have an effective financial plan in place so that you know where you’re heading and how you’re going to get there. Where will you put your money now? And where do you want to be, financially, in 10 years’ time? A good financial advisor will be able to help you to determine this.

4. Consider Following the 50-20-30 rule

The 50-20-30 rule is a general guideline related to how you should spend your money.

The rule states that 50 percent of your income should go towards essentials, like your mortgage payments, food, and other living costs; 20% should go towards savings/investments, and 30% should go on luxury/non-essential purchases such as entertainment and dining out.

The rule makes good financial sense for many households but it might not be right for everyone, depending on your financial situation. Nonetheless, it may be a smart money move worth considering!

5. Prioritize Clearing Debts

Debts usually come with interest rates. The longer you have them, the more you’ll end up paying out. It’s usually sound financial advice to suggest that avoiding debts as much as possible is the best route to go down.

However, we don’t live in an ideal world and debts are sometimes unavoidable. If you do have debts, you may want to prioritize clearing them as soon as possible.

Read More: 4 Tips For Reducing Your Debt in Preparation For Your Retirement

6. Explore Your Refinancing Options

If you can’t clear your debts any time soon, you might want to look into refinancing. Refinancing is when you replace an existing loan(s) with a new loan. It might help you to save money if your credit score has improved since you first took out the loan, as you may be able to negotiate lower rates of interest.

7. Set Aside Some Emergency Savings

Once you’ve cleared your debts, it may be a good idea to set your next financial goal post at creating an emergency savings pot. Once you have emergency savings, you can fall back on them if and when you experience unexpected financial hardship.

This may help you to save money in the long run as you’ll be less inclined to use credit cards to cover any shortfalls, as you’ll be able to use your savings instead. This may help to protect you against accruing further debt and paying more interest.

8. Learn How to Budget Accurately and Stick to it

A good budget can help you to stay on top of your finances so that you don’t overspend, and put away the amount of money you planned to each month. Some people fail to stick to their budgets as they set unrealistic targets and expectations.

Learn how to budget effectively and accurately and put some measures in place to help you stick to it, and it may help you to better manage your finances.

Read More: Budgeting Tips to Help You Save for Retirement

9. Cut Unnecessary Bills

If you’d like to manage your finances better and save more money, it may be worthwhile to review your bank statements for unnecessary bills. If you look over a few months of statements, you can make a list of all the recurring payments and direct debits that you have in place.

Once you know where your money is going, you can check to see which payments you don’t really need to be making, and cancel them.

10. Speak to Ethica Private Wealth Specialists!

All the tips above provide general information that doesn’t take into account your personal financial situation. That’s why, for our final smart money move, we suggest that you speak to Ethica Private Wealth Specialists for more accurate and reliable advice.

Ethica Private Wealth Specialists are experts in financial and retirement planning. The qualified team here at Ethica can help you to achieve your financial goals by taking into account your financial objectives and requirements and offering you personalized, expert advice.
Get in touch with us today for a free consultation.