Friday 11 October 2019

Three Moves To Make Smarter Money Choices Every Day

Image via Pexels - CC0 Licence

Every day, we face lots of small financial decisions. We want to make smarter choices so that we can provide for our families and save for their future, but these grand resolutions can often fall down when it comes to the daily choices that we make. They seem small and insignificant, but actually the money decisions we make on this micro-level are born of habit, and they work together over a lifetime to define our financial position.Sorting out your underlying approach to money is a fundamental shift, but it can pay dividends to challenge the lazy financial habits we can slip into and create a bright road ahead through making conscious, informed choices.

Get The Long Term Mindset

How many of us are guilty of living paycheck to paycheck and never really thinking further than next month in anything but the vaguest terms? But building lasting wealth is about seeing the bigger picture, and keeping it present in your mind during each daily challenge.This sense of perspective should influence every financial decision we make, from opting for that expensive take-out latte to shopping for a new family car, setting up a retirement fund or saving for a family home. Start by logging onto your bank account and really analysing your daily transactions over the last month. Notice the habits you have - such as ordering that Deliveroo every Friday night. Then add up what that habit costs you over a year. Next, calculate how much that same amount could generate if you were to invest it instead. Savings apps like Moneybox often contain a handy projection feature that can show you how much an investment is likely to make you over a year. Get real about what those daily habits are actually costing you.

Shop Around For The Best Deal

Too often, we get into habits with things that mean we end up overpaying because we don’t shop around. The mad thing about that is that it's now easier than ever to compare prices thanks to the internet. Everything from making sure you’re on the best tariff for utilities, so using the Amazon Price Match feature to ensure you don’t overpay on purchases, to shifting your insurance on a yearly basis once great introductory rates have ended. Before you purchase anything, ask yourself if there’s a way to get a better deal. Building this kind of planning in is a great idea for large purchases- for example working with a dealer like CC Specialist Cars to secure the vehicle you want pre-owned - but it can also pay off with smaller items, but delaying impulse buys and giving you the time and space to question if you really want something.

Fund Your Lifestyle With Cash Not Credit

Credit cards shouldn’t be seen as evil - they are a useful financial tool in the right hands. But the danger comes when people use expensive credit to fund their lifestyle. Meals out, new clothes and things like that should never be purchased using credit, unless it's a zero percent deal that is paid off before it attracts interest - and even then it's not a bright idea if you aren’t very financially responsible. Use credit wisely to cover genuine emergencies or give you the option of breaking a large planned essential purchase and instalments. If you do use one, always aim to get a low or zero introductory rate and pay the balance off as soon as possible. If you find yourself reaching for credit just to get the groceries, then it's definitely time for a budget rethink.