It is an exciting time to be an investor, and you’ll have noticed the recent improvement in markets this summer. As part of the positive momentum, now could also be a good time to take your own proactive actions around your investments.
You could take some time now to give your personal finances a boost, potentially putting yourself in a stronger position to navigate the recent rises in inflation. How can you do more with your money? It all starts with you engaging with your personal finances.
Give yourself a financial audit.
Start by giving yourself a financial audit, write out all of your income and expenditure. This is quite often a useful way of realising all the unnecessary spending across your accounts. It could be the case that some small tweaks could save you a fair amount of money.
Likewise, income, look at what’s coming in and how you could maximise this to greater effect. For example, could you use your income more tax efficiently by investing more of your income directly into your Pension? TPI Pension eligibility and tax rules apply.
Set a budget.
Once you are comfortable with your income and expenditure, consider how you could set a budget to ensure there is no more leaking of unnecessary spending. For example, telling yourself you’ll only spend X amount at the coffee shop in any given week is a great way to ensure you don’t drift into making a treat a daily expensive habit.
Budgeting takes discipline. Pay your bills and investments at the start of the month, so you have a clear view of what your disposable income is for the remainder of the month. From this you can portion your spending appropriately. Perhaps consider using an excel spreadsheet to stay on top of your outgoings.
Invest at the start of the month.
Investing at the start of the month is known as paying yourself first. This can be done through a direct debit, so that your investment is on auto pilot, almost like a bill.
The beauty is that it isn’t actually a bill, your automated investment is going towards your goal, and hopefully adding growth – hence you are paying yourself, with the aim of your money returning even greater value.
Once you have a clear view of your income and outgoings, deciding how much to invest each month is a lot easier.
Plan for the future.
When getting your finances in order, you should also plan for the unforeseeable. This means putting in place an emergency fund, typically enough to cover three months’ worth of living costs. With this in place, you are less likely to be blown off course in your spending, saving and investment habits.
Once you have set your outgoings, incomings, and investment, stay disciplined towards your goal. That means not giving yourself excuses, don’t splurge on unnecessary extra spending, stick to your saving and investment habits with the view to a bigger picture.
To help with this, track your performance. When investing with the True Potential app you can see how your money performs against your goal. You’ll also find useful tools such as True Potential Rewards, which can help you with making savings on your spending.
Take the time today to get your finances in order, helping yourself to do more with your money.
With investing, your capital is at risk, investments can fluctuate in value and you may get back less than you invest.
This blog is not a personal recommendation or financial advice. Pension eligibility and tax rules apply. Information correct as of August 2022.
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