There is nothing more true than that old adage of “look after the pennies and the pounds will look after themselves” but how many of us do indeed, watch those pennies?
Do we really take enough time to track what is coming in and out of our bank account? Keeping track of what money comes in is easy, but not as important as knowing what and where that money is being spent on.
In this section, we look at making a few common sense changes and hopefully in time, you’ll be a more knowledgeable master of your finances like you never imagined.
1. Know your bank balance at all times
Keep an accurate note of your bank balance and avoid costly overdraft charges by agreeing a safety limit with your bank before you need it. Some banks will even send you a SMS message when you are approaching your balance limit.
2. Pay off your credit card balance each month
Pay your credit card bill off before the interest charging period starts. A simple thing, but something nearly everyone forgets (or neglects) to do. Setting a reminder in your phone each month to do this will save you a small fortune each month.
3. Transfer balances between credit cards
If you are struggling with the interest repayments on your current credit card or you simply want to defer paying hefty interest charges, think about transferring your credit card balance to another company which offers 6 months or more interest free credit if you transfer your existing card balance to them. Remember to always read the small print as there is likely to be a transactional charge for balance transfers. Even if there is a charge, it will most likely cost a lot less than the interest you would be paying if you kept your balance on the original card.
4. Use cash and not cards
If you have difficulty in keeping tabs on what you are spending, withdraw your weekly spending budget in cash. Leave enough money in your bank account to pay the bills you know will be deducted automatically. Seeing the physical cash and how quickly it actually leaves your wallet will change your spending habits for sure!
5. Save the small stuff
Start a loose change jar! It’s surprising just how quickly that loose change will start to turn into a handy lump of cash and just when you need it. Encourage your children to save their pennies, that way they won’t be asking you for money all the time and they’ll gain a better appreciation of how much things cost when they have to dip into their own funds!