Are you a meerkat or an ostrich? It might sound like a funny question, so let us explain. When you picture a meerkat, you picture them on their hind legs, looking around at everything. And when you picture an ostrich, we bet it has its head buried in the sand. So when it comes to managing your money, which one are you? Are you a money meerkat, constantly monitoring your financial comings and goings, or are you an ostrich, preferring not to know exactly what’s going on with your accounts?
Whichever you are, or if you’re somewhere between the two, there’s no right or wrong way to be. Everyone manages their money their own way, and different approaches work for different people. If you have very simple finances or share responsibility for your outgoings with others, then checking in every day might be unnecessary. But on the flip side, if you have lots of money coming and going from your account, being a financial ostrich and burying your head in the sand could leave you in a sticky situation.
You need to know where you stand
The key to improving your financial situation is knowing what it is to start with. To know where you’re starting from, you need to keep a regular eye on your bank accounts, and check your credit score at least occasionally, too. What regular is means different things to different people. It could be a daily check on your online banking, or it could be a monthly session where you sit down and review your accounts. By keeping an eye on your income and expenses, you’ll know what your limits are.
You’ll see how much, if any, buffer you have once the essentials are taken care of. Also, what kind of unexpected expense would tip you over the edge. You will be able to see where you have the opportunity to make more of your money by cutting back on your costs. By monitoring your credit score, you’ll know what kind of financial products you’re eligible to apply for and who will likely approve you. This means you can apply for loans tactically when you need them and avoid having unnecessary searches on your credit file.
Fraudsters love an ostrich
Fraudsters are unbelievably clever, and they manage to get past even the most vigilant of us scarily often. So you can imagine how easy it is for them to get away with stealing from a financial ostrich. After all, if you aren’t checking your account, how do you know someone’s been in it? It sounds dramatic, but it’s possible! Fortunately, the banks are exceptionally good at spotting unusual transactions, which takes some of the pressure off us to diligently monitor our accounts. But, no system is completely infallible and by routinely checking your accounts for yourself, you’ll know very quickly if something looks amiss. Then you can do something about it.
Cut back on the interest and fees you pay
If you routinely run a little short on funds towards the end of the month, it’s easy to slip into an unauthorised overdraft, have direct debits returned, or have to rely on credit a little more than you’d really like to. And of course, all of these things come with a cost. By checking in on your accounts and all your financial comings and goings regularly, you’ll be able to see those pain points before they hit. That means you’ll have time to make a calm decision about how to cover your expenses, rather than panicking after the fact.
Avoid awkward situations
Have you ever been caught short? Not like that… for money. It’s happened to all of us at one time or another, and it can be really embarrassing. Being caught out with less cash than you thought you had is kind of forgivable, but if your card gets declined while you’re shopping, even though the shop assistant is being really nice about it, you know they’re secretly judging you and it can make you feel humiliated, distressed, and worse!
So what can you do?
When it comes to money, ignorance is definitely not bliss. Checking your accounts regularly and having a routine can help you to predict any sticky spots you might get into before they happen. This makes it easier for you to take actions so that looking at your finances is a bit less painful. Here are some hints and tips to help you get started:
- Sign up to a free credit scoring service and get fraud alerts. That way you’ll know if anything unusual is done in your name as soon as it happens
- Set up alerts with your bank to update you on your balance every week. If your balance drops below a level you’re comfortable with, you’ll know about it in enough time to save yourself a headache
- Sign up to a money management app. There are tons to choose from, some free, some not, that you can use to set yourself budgets, track your spending and keep a general eye on what you’re spending your money on.
- Set aside some time each week or month to go through your finances, either by yourself, with your partner or housemates, or a trusted friend. Check your receipts against your bank transactions, see how much money you have left until your next payday and re-juggle your budget to accommodate any unexpected costs that arise. A perfect task for a rainy Sunday afternoon!
Looking for more tips on how you can make more of your money? Check out the rest of the Sunny Blog for ideas!
How do you avoid being a money ostrich? Let us know in the comments!
