MANAGE YOUR MONEY BETTER

Life is better with good money management skills: you’re less stressed and worried about your credit rating, indulge without guilt. But the even better news is that anyone can improve their approach to personal finance. The key is to check where your money’s going, and then make changes that serve you and your financial goals. Read on for basic finance tips - including how to improve your credit score.

A credit score is a number that reflects your current level of credit risk, based on past financial behaviour. Your credit score is calculated by credit reporting agencies, who examine the money you’ve borrowed and repaid from companies in the long term. Sources of information that can contribute to your credit history include bank accounts, loans, debts, and your current credit limit.

Each agency calculates results differently, but in general, a higher score suggests that you are in good financial shape. Lenders use these credit ratings as part of their criteria to determine if they’ll lend money to you, and under what conditions (the amount, rate of interest, and repayment schedule). A higher number will likely increase a lender’s confidence in you meeting your repayments and vice versa.

Credit Cards, of course, contribute to your score through their representation of your spending and repayment history. However, they can also help you maintain a favourable financial figure by helping you to manage loan repayments and pay your bills.

Learn more about credit score from here.

Reducing your debts makes managing money so much easier. Establishing a clear financial plan for paying off debt will create a consistent repayment history, which can be a beneficial way to improve your credit score. Managing your debt can also strengthen your borrowing capacity for larger and longer-term purchases, such as a new car, or your dream home.

Make sure you maximise any Card benefits that can help you to manage your repayments. Plan It ^®, for example, allows Credit Card Members to pay off either recent transactions, or a portion of their balance, in equal monthly installments, with 0% interest, however, a monthly plan fee applies.¹ Taking advantage of this feature means that you’ll know exactly how much to pay on your balance each month, which you can then factor into your spending.

Things get brighter when you’ve paid off debt, because you can then set aside the same amount you’ve been devoting to your repayments to savings accounts! Savings can create a stronger sense of financial security and freedom for you.

Knowing where your dollars are going is crucial for effective money management. Peeking into your bank account to check its balance might be quicker and easier but tracking your spending will give you valuable insights into your personal finance: what you’re buying, where you can reduce or avoid overspending, and how these can inform your budget.

Budgets are a beautiful thing. Not only do they make spending money a breeze, but they also help you to manage debt, track income against expenses, and enable you to make spending decisions that align with your financial plans in the long term. When you budget, you hold yourself accountable to your goals, and have a guide that can help you make spending decisions that are tailored to you, and you are alone. But your budget should also give you the opportunity to spend money on things that make you smile - without detracting from your other monetary priorities. Your budget should also change over time, so it consistently reflects your financial position and obligations.

Tracking and budgeting will make your spending more mindful: you might even find it easier to shop at the supermarket, because you’ll be in the habit of examining prices and making lists to save money and stick to your grocery budget. No matter how your budget serves you, you’ll find that you’re lowering your financial risk by reducing your impulse purchases and managing unexpected expenses. These small steps can empower you to make bigger leaps in your financial journey, as your tiny habits create other positive financial decisions.