10 tips for managing your finances
10 great tips for managing your finances from Susan Worthington our Partner of the Spectrum IFA Group for the Balers and Mallorca.
- Keep control of your finances. It’s easy to spend more than you earn rather than earn more than you spend. One reason for this is that unless you track what your regular expenses are you can never budget. This is the vital first step to managing your money.
- Be sure to budget for rainy day money. In working out your monthly expenditure try to include a little for the emergency pot, you never know what is around the corner. Set it aside in a flexible account where you can get your hands on it in case it’s needed quickly, this is money not to be tied up in an investment of some kind.
- Keep credit card debt to a minimum. This is another vital payment to be included in your monthly expenses as it is the no.1 obstacle to getting ahead. If you have large credit card debts try to stop using the card and pay bits off each month. The amount of interest you are paying if saved, could be put to better use.
- Pay your bills on time. Bills such as your IBI and car taxes, if not paid on time, result in fines which are quite hefty and end up costing you much more than you need to pay. These annual bills are often the ones that catch us out and form part of the exercise mentioned in No.1. Try to pay them as soon as they come in.
- Review all of your insurance policies. When you think about all the different types of insurances we pay, e.g. car insurance, life assurance, home insurance, medical insurance, travel insurance, pet insurance etc. they amount to substantial sums over the year. This is where you could make a saving which might help paying off credit card debt. Speak to your insurance brokers and ask before the payments are due if you can save some money this year by looking around at alternative policies. Banks are now also offering very good deals for their customers on grouping together your insurances. Your broker will know this and I’m sure will want the best deal for you.
- Update your Will. If you own assets anywhere then you need a Will. If you own assets in Spain then a separate Spanish Will is also advisable. There were changes to Spanish Wills on August 15th last year which means that unless a certain clause is written into your Will then children may benefit before the spouse does. Caution is recommended here if you have children from a previous relationship.
- Use only legitimate financial institutions. You need to know that your money is protected, all major institutions are required to provide some level of protection. What happens to your money if the bank or investment provider fall into problems? Check the amount of protection and then spread your money to diversify any risk involved. Check also the fees that the institutions charge.
- Think and/or take advice before spending or acting. Do not rush into anything that feels uncomfortable. If it’s too good to be true then it usually is! If you are making a big decision such as buying a property or investing your savings, take advice from the experts first.
- Use the services of professional people. If you need tax advice you need an accountant, lawyer or gestor. If you need investment advice you need an expatriate financial adviser. If you need banking advice nearly all banks have a dedicated adviser. There are mortgage brokers specialising in mortgage advice and insurance brokers specialising in general insurances. Some may charge a fee for their service, however you could in the long term be better off.
- Enjoy and respect what money you have coming in. We speak to many people who fear money and as a consequence avoid the responsibilities associated with it. Money can be interesting, it can bring you things that you need and want in life, without which our life is not as enjoyable. If you feel negative about money try to turn that belief around……if you have to pay tax then that means you are earning the money to be charged it. Seeing it as a part of our daily existence, with the many positive things it can do may help to make you feel happier.