Ten Effective Ways to Make the Most of Your Money.

You have to work pretty hard to earn your salary, so make sure you don’t waste your effort by losing money unnecessarily. These are some tips that will make the best use of money and maximise your financial welfare

Spend Wisely

It is easy to get into a mode of overspending, buying things that we don’t really need. If you have a wordrobe with 100s of shoes you never wear, think carefully before buying anything on impulse. Try avoiding credit cards and carrying cash around; when you have to part with notes, it often gives us a sharp reminder about the true cost. Avoid marketing tricks of companies; buy goods that you really need and value, not just goods which are cleverly marketed. see: 7 Ways to avoid overspending

Borrow With Caution

It would be easy to say never borrow. But, the reality of modern life is that going to college or buying a house inevitably involves borrowing. The important thing is to borrow with a clear purpose of what you are getting. If you are borrowing to invest in improving your education or buying a house, you are making a sound long term decision. If you borrow, just because you spend money on takeaways this offers no long term benefit and will just lead to a deteriorating financial situation. The other important consideration with borrowing is to always avoid borrowing at expensive interest rates.  Try consolidate high interest debt into the lowest possible rate.

• Whatever borrowing you have, make sure you have a clear plan of how and when you will pay it off.

Keep upto Date With Finances

A significant % of personal finance problems stem from a lack of understanding and poor knowledge about your own financial situations. For example, are you aware of all your debts and how much interest you are paying on them? Even a small amount of credit card debt can soon escalate into a serious problem because your minimum payments only cover interest payments and not capital repayments. Debt can either snowball out of control or, with careful planning, be brought quickly under control. Avoid the temptation to ignore your problems hoping they will go away. Gaining a clear idea of what your situation is is the first step to improving your monetary situation

Protect Your Credit Rating

A poor credit rating can make life difficult, especially in the current climate of capital shortages. To maintain a good credit rating it is important to keep all bills regularly paid and avoid any unauthorised overdraft. Direct debits can be an excellent way to avoid missing payments.

Take Advantage of Special Deals

Banks and companies do offer attractive introductory deals which offers the opportunity to save on interest payment temporarily. It is important to read all the conditions. If you are not careful, you could be misled into a product that ties you in. However, I have often successfully used 0% interest  balance transfers to improve my cashflow situation and avoid paying excessive interest rates. These balance transfers are OK, so long as you use them judiciously and avoid the temptation to get more into debt.

Learn How to Effectively Complain

It is not just consumers who make mistakes with regard to finance. Multinationals and banks can also make mistakes such as overcharging customers. If you think you have been unfairly treated it is worth pursuing it. Write a letter of complaint. Even when the bank doesn’t make a mistake, they can sometimes be generous. For example, my mother left her card in the cashpoint and someone came along and took out £200. It was completely her fault, but she wrote a nice letter to the bank (Halifax) and they made the unusual step of refunding her £200 as a gesture of good will. This shows that Banks are interested in creating good public relations and it is always worth raising issues. How to Make an effective complaint

Give Value to Time

There is an old saying ‘time is money’ and this is definitely appropriate. It is good to save money, but if it takes an hour to save the odd dollar, you have to realise that it is probably not worth it. Use your time to pursue big potential savings like rechecking for the best insurance and mortgage quote. Don’t spend hours quibbling over a few cents on a telephone bill. The aim of life is not just to save money. Give value to time.

Money and Happiness.

The aim of life is happiness not the accumulation of money. We can be rich and miserable; but we can also be poor and miserable. The best attitude to money is to earn enough to be able to do the things that you want to do. Don’t constantly aim for more; think how you can maximise what you have. If you completely ignore financial issues, you will worry over the large debts you accumulate. But, if you only focus on money you will be miserable too. Work out the best balance.

Budgeting

The art of good budgeting is to keep it simple and workable. Decide how much you want to save or pay off debts and make this a priority in the month. Be ruthless in stripping away unnecessary spending. Examine each monthly bill and decide whether you really actually benefit from it.

Avoid Worthless Financial Products

These are some of the worst financial products. Make sure you don’t get caught up in taking out rubbish financial products. A little finance education can soon pay you back in terms of money saved. If you are confused by the array of financial products on offer take expert advice; it could save a lot of money in the long term.

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