Whether you have planned a holiday, want to purchase a new summer wardrobe, or would like to fill the school break with activities, it is crucial to have your finances under control for summer. In this post, we will be offering some tips on how to prepare your finances, so you can make the most of your summer.
1. Try To Pay Off Existing Debt
Sometimes it is easier said than done, but you should aim to pay off any existing debts. This could include credit card debts, loan repayments, or overdrafts. You could try to use savings or personal borrowing, if you have trusted friends and family members to help. If you have exhausted all other options, there is the possibility of using a debt consolidation loan, which can combine your debts into a single monthly repayment. Please speak to the Money Advice Service if you need further financial help.
2. Track Your Spending
Keep a log of your monthly income, essential spending, and any other spending that you do to see how much you truly spend each month. With today’s technology, it is very easy to spend at the touch of a button, but lots of small purchases can mount up. By writing everything down, you can hold yourself accountable and have a true understanding of where your money is going.
3. Check Your Direct Debits
In a similar vein, check what goes out of your account every month via direct debits. Are you paying for things that you no longer need or use? Companies will not usually tell you if you are paying them money for no reason, so you need to make sure you are on top of direct debits. You should also take this chance to see if there are any opportunities to reduce your necessary direct debits or switch providers to find better deals.
4. Build A Financial Backup
It is sensible to have at least three months’ worth of cash in the bank, but in reality, anything on top of that is a valuable bonus. You never know when life can throw an unexpected curveball your way, so it is essential to have backup funds, just in case. If not, you may end up needing to pay for large expenses on a credit card, which will gain interest over time, resulting in you paying more.
5. Understand Your Financial Situation
The ostrich approach of burying your head in the sand when it comes to finances is all too common. However, if you want to truly get a handle on your funds, it is key to know what you have coming in each month, and how to manage your spending accordingly. It is also essential to look at where you can cut back to improve your cashflow and help you save for those all-important summer moments.
These are just a few simple steps you can take to start preparing your finances for summer. Make sure you do not hang around to get started, as the sooner you begin making the changes, the sooner you will feel ready for the summer months. If you need any more support, please seek impartial help from the Money Advice Service.
