Three Solutions For Finding Financial Happiness
‘Financial happiness’ – two words with a magic ring to them. Unfortunately, that magic will remain a dream for most, as thousands of households in the UK are either just about making ends meet or deeply in debt. And yet, the road towards stability is anything but a mystery. It leads from a few fundamental decisions and a strict adherence to their implications to a sensible and healthy balance between your spending and earning as well as a gradual return into the black. The problem for most is seeing this plan through, as it requires a lot of patience, stamina and endurance. Which is why it reassuring to hear that there are three basic solutions to achieving financial happiness. Keep them in mind – and that dream could just come true.
1. Stop building up debt
Before you can even start thinking about financial happiness, you need to turn the tide and stop spending more than you’re earning. Easier said than done? Probably. Still, there’s a lot you can do even if you’re struggling to make ends meet. Firstly, get yourself a guaranteed account. A guaranteed account, also sometimes referred to as a bad credit bank account, is an electronic account which does not allow for overdrafts. By signing up for one, you are therefore instantly preventing yourself from racking up yet more debt – plus, you’re repairing your credit rating as you go. Secondly, at least for one or two months, slash every expense which isn’t necessary strictly speaking. Then, slowly, fade some of your extras back in. This way, you can reset your finances, while coming up with some creative solutions on how to improve them in the future.
2. Start bookkeeping and budgeting
How can you know where to start saving money, unless you know what you’re spending it on? It is almost frightening to see how many households are entirely unaware of their exact spending patterns and especially of many recurring costs for services they no longer need. The good thing is that you can make a change straight away. Take a look at all your bank statements from the past months and check them for any unusual, seemingly unnecessary or excessively high withdrawals. Then, cancel all of them straight away or prevent them from ever re-appearing. To keep the lid on your cash spendings as well, keep a record of your expenses – even of seemingly trivial purchases – and, again, analyse these notes at the end of each month. Calculate how much you can spend to remain in the black and then set yourself a budget accordingly. By sticking to it at all costs, you have successfully brought your finances into equilibrium.
3. Get your money to work for you
As long as your spendings were still exceeding your earnings, it didn’t make sense to think about how to put your money to work for you – there simply wasn’t any left. Now, however, you can carve out a better future for yourself and your family without actually taking any irresponsible risks on the stock markets. Although it is vital to keep a certain safety reserve on your guaranteed account, you can nonetheless start looking for alternative options, such as a call money account, to get interest on your money. This way, you may be able to cover a lot expenses on interest alone – or start planning for your pension.
As you can see, financial happiness is definitely within reach. With these three solutions you should be able to make a fresh start. It won’t be easy – but neither will it require magic power.
This article was written by William Masters in association with eccount money, a leading service provider for online banking and guaranteed accounts. W. Masters is a finance journalist currently living in London, United Kingdom. Over the past decade, he has written for a plethora of respected financial publications, dealing with issues of personal- and online finance, debt reduction strategies and credit card technology.