Getting Your Personal Finances in Order - Tips
Your personal finance is extremely important - it is the cornerstone of who you are. If your personal finances are not in order then the situation often just becomes harder and harder to manage and rectify. Firstly, take a look at what outstanding credit (debt) you have remaining. This could be things like credit cards, personal loans, and similar. Why do you have these debts, and what are you doing to pay them off?

One first crucial personal finance tip is to pay off as much of your debts each month as you can afford to - do not pay off so much you cannot eat or drink, but do try to pay off whatever you can afford to. By doing this you are reducing the amount of interest you are being charged each month by the credit provider, and also reducing your debts faster. Even by paying off just a small percentage more each month than normal can often save you hundreds - if not thousands - of pounds in interest over time that would have otherwise been charged on your outstanding debts.

Personal Finance Tip 2 - Look to acquire assets rather than liabilities. Assets normally make you money whereas a liability will simply cost you money. For example, an asset could be classed as property (one you could rent out, or generally goes up in value over time), whereas a liability could be classed as a car (as it generally goes down in value the more you use it). Through buying assets you are getting your personal finances in shape for the long-term - see them as investments that you can sell in the future and realise the cash from, thus giving you a return on your investment you can use towards your retirement.

Personal Finance Tip 3 - If you want a liability, first create an asset to pay for it. Liability-heavy people generally have very little net worth (ie. liquid capital / money in the bank), whereas asset-heavy people tend to have accumulated a strong net-worth over time through their investments. Some asset-heavy people may not have huge volumes of cash in the bank available for disposal, however they do have plenty of cash tied up in their assets which they can sell and realise the value of whenever they require additional cashflow. This is not generally possible with those who are heavy on liabilities.

Personal Finance Tip 4 - Whatever you already save, open up another savings account and set up a standing order to pay £25 per month into it from your current account. It may not sound like a great deal of money, but over 5 years it will amount into a useful extra £1500 plus interest, so more likely closer to £2000.

Personal Finance Tip 5 - Make sure you are taking full advantage of your annual ISA allowance. Each year you can save a certain amount completely tax-free in something called an ISA. There are various ISA's available from the major banks all offering differing rates - some are fixed rate ISA's others are not, some offer better rates for leaving the money in the ISA and not touching it all year, so shop around. Either way, if you don't have an ISA, you are not making as much as you could be on a certain percentage of your savings.

Personal Finance Tip 6 - Saving money by adjusting your driving style. This is a very simple and effective tip which can often result in savings of £10-£20 per month for someone who commutes in their car every day to work and back. Firstly when you pull away from traffic lights or junctions, do not over-rev your engine and change into a lower gear as soon as possible. Do not over-accelerate or race around, especially in town between traffic lights, you won't get there any quicker during rush hour but you'll use more fuel rushing between lights! Do not use cruise control on the motorways - cruise control actually makes your car much less fuel efficient. Instead use the throttle to get you up to speed, then ease off the throttle and only use it again to bring you back up to a fairly constant speed. Do not simply keep your foot down maintaining the 70mph - using 'squirts' of throttle will reduce fuel consumption and get your further on the same tank of fuel! Also try cruising at 5-10mph less than your normal motorway cruising speed. This also has a positive effect on your MPG.