We would all like to be smarter with money because money affects almost everything we do and is an important part of our lives. Thankfully, you don’t have to be a financial expert in order to manage your money effectively.

Employ the following habits, and you’ll be well on your way to spending, saving and investing like a pro. 

1. Audit your Expenses

The financially savvy individual understands that the key to keeping their finances on track is to know where they are. In today’s world, we often sign up for services like Netflix, Amazon Prime, Spotify etc. without really thinking about our finances in the long term.

The problem with this is, if you do not take the time to review your spending habits, you will not be able to tell where you might be overspending, which could keep you from attaining your financial goals.

Even though your weekly or monthly budget will help keep you on track in the short-term, to truly evaluate your financial situation and get smarter with money, conducting a thorough audit of your personal expenses is the way to go.

Carefully look at all your expenses, on-going and one-time purchases, financial records, and any other money spends, then adjust 

       2. Live Below your Means

In most instances, you can live comfortably below your means. It all begins with re-evaluating your lifestyle. For example, just because you can afford to spend £100 a month on dining out, doesn’t mean you should. Instead, limit yourself to £50 for takeout and restaurant dinners, and out the extra £50 into your savings.

The extra money you save by making lifestyle changes like this can then be channelled towards your larger life goals. Future you will thank you for the foresight.

   3. Make Saving Automated

If you struggle with saving, automating your savings will help tremendously. You can have funds automatically deducted from your current account and directly put into the account you’ve created to hold your savings towards a significant purchase.

Having the funds placed in the accounts without your active involvement increases the likelihood of it staying there until you meet the timeline you have established. You can do this through a standing order each month, by enabling functions such as a ‘save the change’ type feature that rounds your purchases up to the nearest pound and deposits the extra from your purchase into your savings. 

 4. Pay off Debts

One of the best things you can do for the health of your finances is to pay off your debts. Start by clearing off the most expensive debts, such as high-interest loans and credit cards. Once you have paid these off, focus on your mortgage. 

Consider splitting your monthly mortgage payment in half by paying bi-weekly and pay extra when you can afford to. Doing this will shave off years on your mortgage and save you thousands of pounds in interest.

        5. Start Investing 

With investing, the earlier you begin, the better off you’ll be. So, the right time to begin is now.  The sooner you begin, the more time your investment has to compound. That is, in addition to earning returns on your investment, you can also earn returns on your initial returns over time.

So, if you invest a small amount and let it grow over a number of years, you’ll end up with a sum that is much larger than your initial investment. 

Please note, all investments come with a certain amount of risk, and you’re never guaranteed returns. However, it is still the only tested way to build wealth.