Practical Money Management for the Over 50s Bedfordshire

Now you’re over 50 you have to travel back a long way in time to when you were a child and you first started handling money. Take a minute to think about what it meant to you then, and what you did with it.

Although much has changed in the world over those many decades, surprisingly our underlying attitudes to money often have not.

Most of us still like to be able to see clearly and quickly just how much money we have. We like to know that if we save our money it will not only be safe but it might mean that we end up with more. And we like the feeling that although we know we need to spend most of our money on “sensible” things, we can still have some left over for treats (which today might cost more than a bag of sweets).

So what can you do to reconcile those feelings with the reality of handling money in today’s economic and financial environment?

The satisfaction of saving

In today’s relatively sophisticated financial world it’s not really efficient to keep your money in a cocoa tin or a sock under your pillow. Practicality dictates that it goes into a bank or building society account, where we can still get that sense of achievement and control from reviewing our bank statements.

But for smaller amounts, sometimes it can be good – and motivating - to see the money actually accumulating.

For example, you decide to save by no longer buying an expensive coffee every day from your local coffee shop. So physically put that amount of money every day into a tin or jar so you can watch it grow. Then when it reaches a certain level (surprisingly quickly!) either reward yourself by buying something else more substantial, or put it in the bank. Satisfying, or what?

Interest and loan payments

When it comes to making larger savings you need to do something different.

It’s pretty certain that if you have a property then you probably have a mortgage. As you know, this is a long term loan, with reasonable interest and repayment requirements, which have been negotiated on the basis of your income expectations and which is secured on your property. It is planned for and everyone knows where they are.

Overdrafts and credit provided through credit cards are monumentally different. Interest rates vary from high to astronomical and no real account has been taken of your ability to service (pay interest and make repayments) these debts. They can become a millstone around your neck and if you can’t make the necessary payments your obligations will snowball.

You may have developed these liabilities for any number of reasons, some pure indulgence. So in future, this is where the real benefits of economising come in.

If you can cut back and make savings then you won’t be increasing your debts and the money you have been saving will pay your interest, or even better repay amounts owed so reducing your future interest payments. In time you will be unshackled from these burdens and in good financial shape.

Now, isn’t that worth doing something about?

Financial tracking and planning

Finally, if you’re not already conversant with IT spreadsheets (e.g. Excel) now is the time to become so. If you keep your accounts on a spreadsheet you can see exactly where you are financially at any point in time.

You’ll then be in a good position to consider other aspects of keeping your finances under control, for example:

• Getting online access to bank and savings accounts, bills, etc.
• Paying bills by direct debit
• Budgeting and saving for annual bills to avoid the additional charges for monthly or credit card payments.
• Planning your holidays and travel so that you can book at the time when the offers are best.
• Setting up special “money pots” to save for luxuries or treats.

Once you’re in control of your finances you’ll start to have great financial flexibility.

Best of all you’ll start to feel you’re ahead of the game – you’ll be surprised how much this increases your confidence and reduces your worry, anxiety and stress. How much is that worth to you?

Click here for more information about money management from in my prime.