Here are 10 tips to help you get 'in the pink':
1. Define your current financial goals
Women in their 20s are often focused on repaying debts including student loans or setting aside money for a deposit on our first house or setting aside money for a dream holiday. Later on our goals may change especially if we have children and saving for retirement becomes more important in our 40s and 50s. Decide your goals and focus on achieving them.
2. Set a budget
A monthly budget usually works best especially if it matches how we pay rent or mortgage, bills and how regularly we get paid. If you add up all your spending and subtract it from all the money coming in, you can obviously see at a glance whether you are overspending.
3. Keep records of your spending including receipts and bills
By knowing how much you spend, you can compare regularly against your budget plan and make sure you aren't overspending in certain areas. If you are, you will need to find somewhere you can cut back.
4. Open bank and credit card statements as soon as they arrive
Don't put it off just because you may not like what you see!
5. Prioritise your spending
Set and stick to your budget priorities. Pay off your debts first. Luxuries such as nights out and additions to your wardrobe should come at the bottom of the list!
6. Try to put some money into savings
If you can, try and set aside a regular monthly amount. If that's not possible right now, try to put some money into savings when you can. Regular saving is one of the keys to financial happiness. You may want to refocus your spending from unnecessary luxuries, like the daily latte or another pair of shoes into a savings project like a holiday.
7. Pay your bills on time so they don't mount up
It makes life much easier if you use standing orders and direct debits.
8. Only borrow what you can afford
Look at how much you owe and the repayments you can afford before deciding to borrow any more. Always allow a bit of breathing space.
9. Think about how you borrow
For long term borrowing, a personal loan may be best – and you will know exactly how much you have to repay each month. For short term borrowing, a credit card may be a more flexible way to spread the cost. Also, listen to your lender. New customers will often be given low credit limits and cannot increase the limit for a period of time. This is to ensure that money is not lent to people who cannot afford the repayments. If you are uncomfortable with the amount of credit you have access to, ask your lender to reduce your limit.
10. Act decisively if you think you're in trouble
If you find yourself facing financial difficulties, tell your lender as soon as possible. It is in the banks' interest to be flexible but they can only help if they know there is a problem.
