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Sometimes in life, unexpected events happen, and you end up with an expensive bill you never could have foreseen. In these moments, it is a great help to have some financial flexibility, which allows you to pay your bills without sacrificing in other important areas of your life.
However, achieving financial flexibility isnโt always an easy or straightforward path, so here are five tips to get you started.
1. Make a Plan and Work Towards It
Saving money and becoming more financially flexible are not easy things to do. It takes a conscious effort to save more money, and this means you have to make a plan and set some goals.
Financial planning isnโt the most exciting thing in the world, but it allows you to find areas where you can save and help you deal with unexpected expenses. There are always options like no credit check loans to get you out of sticky situations, but with more planning, you can gain the financial flexibility to help you pay for emergencies.
2. Understand Your Spending
Once youโve made up your mind to work towards more financial flexibility, you need to find ways of reaching your goals. Everyone has some form of non-essential spending they can cut out, whether that be snack food, handbags, or nights out.
You donโt have to cut out the things you enjoy in life, but just find ways of saving while still doing the things that are important to you. A popular ratio to use is to spend 50% of your income on essentials, 30% on essentials, and 20% on savings.
This allows you to build up your savings, so youโve got money saved away for emergencies such as car repairs or medical bills.
3. Pay Off Debts
Using credit cards and taking out loans from trustworthy sources can fit into your financial planning, but itโs important to make sure bills are paid on time, and if possible, in full.
When you donโt pay bills on time, you accumulate charges that significantly cut into your savings, giving you less flexibility. If you pay your bills in full before the due date, then you will save in fees and extra interest.
4. Set Up a Direct Debit to Your Savings
Make saving easy by setting up a monthly payment into your savings account. You can always take money back out of your savings if you need it, but this way you donโt have to remember to add to your savings every month.
5. Seek Help if You Need It
If youโre finding your finances particularly difficult, then there are lots of bodies like Step Change and the National Debt Line that can help you with your financial planning.
Growing your savings and becoming financially flexible isnโt an easy thing to do, and it takes practice and hard work. However, if you follow some of these tips, then it can help put you on a path to becoming more financially flexible.
Dean Smith
March 4, 2020Number 1 is key, falls apart without a plan