Money can't buy you happiness but it can definitely contribute! It's important to know how to manage your money, bills, everyday and unexpected expenses. Here's our guide to avoiding that end-of-the-month panic.
Different behaviour with regards to money
We don’t have the same view when it comes to money, and it doesn’t depend on our bank accounts but on our personalities. Generally, our relationship with money reflects our views on life.
- Spendthrift. Many people are like this! When you're frustrated or anxious, buying clothes, shoes or jewellery can be the only way to (temporarily) relieve anxiety. Without being compulsive, spendthrifts can flash cash without really having the means to, and at the end of the month prefer not to know the state of their bank account.
- Skinflint. If someone is tight with their money, their behaviour is dictated by the need to cumulate and preserve capital. They will regularly scrutinise their accounts and make sensible purchases. Money has an important role in their life and is a sign of material and emotional security.
- Generous. If you love to please people you love, you can often spend without thinking how much something costs. This is a way of gaining people’s respect, and it can be a sign of guilt or (more rarely, perhaps), a sign of real generosity.
- Balanced. Balanced people with a healthy, mature relationship with money know how to manage it, saving when neccessary and spending to treat themselves when they can without feeling guilty.
Managing your money, step by step
- Do your accounts. Accounts are a spendthrift's sworn enemy and cause more anxiety than reassurance, yet, they're very useful and help stop you from getting in the red. Doing accounts should be a habit, not that you should be glued to your Internet banking every day. The best thing to do is look at your accounts once a week so you know what you’ve spent. Another solution is to write down your incoming and outgoing money on a sheet of paper or in a spreadsheet, organised in categories (fixed budget, occasional expenses and direct debits, for example).
- Pay monthly. Pay car insurance, loans, taxes? It’s sometimes difficult to pay a large sum upfront without getting overdrawn. The solution is to pay these steady, obligatory expenses monthly. They often go out of your account at the beginning of the month, so you can see what you have left to spend and avoid getting into debt when payment dates come around. If possible, ask for your direct debit to take effect a few days after payday.
- Budget. Anticipate your usual expenses every month and make an approximation of any other expenses you might encounter: food, petrol, phone bills, Internet, public transport, sport, subscriptions etc. This will be the sum to take into account in your monthly budget every month, subtracted form your salary.
- Stay in contact with your banker. Your banker is there to help, so there’s no point avoiding him, especially if you go overdrawn. Your banker is the only other person who knows your expenses and can find solutions in case of problems. See your banker at least 3 times a year to discuss the state of your accounts and discuss savings and loans.
- Avoid delayed payments. If you know that you can't afford a costly purchase but you still want to go ahead with it, don't delay repayments for as long as you can. You'll only forget about them and find yourself taken by surprise at the end of the month.
- Don't purchase on credit. How many people have regretted those compulsive buys made on credit? Credit cards and store cards charge a high interest rate, so if you can't manage your money in real time then forget it and save to pay for what you want.
- Leave room for manoeuvre. In case of impulse buys or emergencies, it's best to have some funds in your account to stop yourself going overdrawn if something comes up. Better still, set up a savings account you can withdraw money from quickly if you need it.