Many people experience confusion regarding their finances, often feeling overwhelmed by expenses that accumulate from bills, shopping, and social activities. This financial stress can strain relationships with money. To help individuals better manage their finances, experts suggest several strategies.
Firstly, understanding spending habits can be crucial. Anniki Sommerville, a journalist, emphasizes the importance of recognizing what prompts spending behaviors. For instance, she pointed out her tendency to buy clothes as rewards for professional achievements. Abigail Foster, a chartered accountant, advises reviewing bank statements to identify spending patterns—whether certain purchases happen late at night or during weekends. By recognizing these triggers, individuals can make more conscious financial decisions.
Secondly, setting aside dedicated time weekly to manage finances is recommended. Often, people avoid checking their bank balances due to anxiety or discomfort related to financial literacy. Claer Barrett from the Financial Times notes that negative feelings towards math during school can impact financial confidence. However, confronting financial matters can be beneficial; setting aside an hour each week to review finances helps identify unexpected expenditures, such as forgotten subscription services.
Moreover, understanding financial jargon is important. Individuals might find terms like “investing” intimidating, but Barrett encourages users to ask questions for clarity. Creating a list of financial topics that are confusing and addressing them gradually can facilitate understanding.
Finally, for those who can manage it, establishing a “freedom fund” is advised. This fund can provide financial security during challenging times, allowing individuals the freedom to make choices without financial constraints, such as leaving a job or a difficult relationship. Overall, these strategies highlight the importance of financial awareness and proactive management.
Source: https://www.bbc.com/news/articles/c6258nn89dgo?at_medium=RSS&at_campaign=rss