Effectively Managing Your Monthly Wages

There’s nothing quite like the excitement of pay day! Everyone looks forward to it and I am sure you will hear people exclaim ‘...when I get paid I will…! Or ‘I can't wait for pay day because…’ Even email inboxes are full of emails (at least mine seem to be) towards the end of the month from various companies trying to get you to part with some of your hard earned money by proclaiming that it's pay day and time to treat yourself!

Unfortunately for many, the excitement doesn’t last too long and before you know it you are counting down the weeks and days until the next pay day. It can become a vicious cycle and often a depressing one but if you teach yourself to manage your finances then you may still be smiling all throughout the month. However, managing your finances requires careful planning and budgeting to ensure financial stability so here are five tips to get you started.

Firstly, have a look at your direct debits and standing orders and see if you can cancel any unnecessary payments. Even small amounts of money which can be saved can all add up to something substantial. Then look at the remaining payments you have and wish to keep and see if these can be reduced in any way, for example TV and internet packages, gym memberships or insurances. I have done this myself and it is definitely worth the savings.

Prioritise your rent, mortgage, bills, petrol costs for the month, pension plans and any loans you may have taken out of your account. Organise paying off higher interest loans first and research ways to consolidate any debt you have, which will still pay them off but at a lower interest rate. It is wise to seek professional advice if you have difficulty paying off your debt as there are many ways in which the issue can be tackled.

Have a set amount for groceries and stick to it. Do not go shopping when you are feeling hungry as this will make you spend more! A good idea is to order groceries online at the same time each week. By giving yourself a certain allowance which should ideally be the same amount each week, iit can ensure that you do not go over your budget. Additionally, you will not be tempted into buying unnecessary items as you are not physically in the shop. It also ensures you are sticking to a routine.

Now you have covered the necessities, you should ideally be putting an amount into a separate savings account on the day you get paid. By doing this, it ensures consistent saving before you have had a chance to impulsively spend it! Depending upon your salary and by defining your long term or short term personal financial goals, you could start saving for whatever you have set your mind on - a holiday, a car or even covering the cost of Christmas. For example, saving only £20 a month will equal £260 a year whereas £50 a month will be £600 and £250 a month will become £3000. Irregular expenses such as car maintenance, birthdays, dining out, entertainment, clothes etc can all be set aside in a separate account too so you will have access to the money as and when you need it.

Now it is time to budget what you will have left. A budgeting app can make tracking your spending much easier and help you stay on budget for the month by monitoring your expenses. Avoid unnecessary expenditure by being especially mindful of discretionary spending. Evaluate each purchase you make carefully to determine if it aligns with your personal budget and financial goals.

Consistency is the key to successful financial management. Make budgeting and managing your wages a habit that you prioritise and at the end of the month and review how well you have done, adjusting your budget as needed based on your spending habits. Managing your wages effectively requires discipline and patience. By following these steps and staying focused on your financial goals, you can achieve better financial stability and peace of mind but of course, it is important to bear in mind that everyone's circumstances and financial priorities are different.