How to avoid FINANCIAL STRESS
EASY WAYS TO TACKLE MONEY WOES AND EFFECTIVELY MANAGE YOUR CASH
Financial strain can dramatically increase our anxiety and stress levels, so what can we do to manage our money effectively? Gerry Incollingo, managing director of LCI Partners, shares his expert advice on how to keep money worries at bay.
BUILD A RAINY DAY FUND
Aim to put away 20 per cent of your wage each pay day, or put that 20 per cent towards erasing your debt. You’ll want to erase your debt as soon as you can because, in most cases, unless you have an investment property, interest is ‘bad debt’ and means you are throwing additional money in the bin that you could be saving. However, you also want a rainy day fund so that if you lose work for a few months, you won’t have to stress too much. In general, I would suggest having a three-month buffer of savings to cover your expenses. Once you hit the three-month ‘rainy day’ mark, why not keep saving? Over time, you may have enough to purchase a house.
INVEST
You can make more money off of your salary if you are smart with your savings. If you have a buffer fund and then have extra money sitting around, consider speaking to a financial advisor to help you choose the best options for you. You may want to invest in shares or property bonds, property, or you may even want to put your money away into a long-term interest account if you know you won’t need that money for 6 months. There are a lot of minimal-risk ways to make your money go further, so speak to an expert and come up with a game plan that you feel comfortable with.
BUDGET
Breakdown your wage and decide how much you need to pay for essential goods and services, such as rent, utilities and food. Navigate how much you want to save and how much you can spend on entertainment. If you have an entertainment budget, it will make it a lot easier to plan what you can buy and when.
SHOP AROUND
Get better at comparing prices instead of just buying an item the second you see it. Odds are the item you want will be advertised somewhere else for a better rate, or you may even be able to get a good-quality, second-hand item easily. Impulse buying is not a good trait when it comes to online shopping. Make a list of the items you want right now, but do not need. Look back at your list in two weeks time and consider whether you still want these items. Chances are the answer will be no.
• For more financial advice, head to lcipartners.com