To say that the last two years have been challenging would feel like something of an understatement. Facing unprecedented events on both a personal and collective level, the world we live in looks mightily different from what we are used to. Managing life will juggling individual finances has been a daunting task, but every challenge can be conquered.
We have had to adjust various parts of our lives, including the likes of our finances. Many people found themselves tightening their belts throughout 2020 and 2021 due to being made redundant or placed on furlough.
As we head into a new year, you might be wondering how you can continue to manage your individual finances in the best way. Read on to discover how to do just that and more.
Budgeting Your Individual Finances
While this might feel like a suggestion that you hear all too often, it is still one that is worth mentioning here all the same. It is important to budget your finances, for this will prevent you from landing in any sort of financial trouble. Being able to determine where you might be overspending enables you to budget properly, moving savings between bank accounts, and even limiting how much you spend out and about each month.
Measures like these might appear time-consuming in the short term but are undoubtedly worth it overall. You will be able to monitor your income and save wherever possible. Your future self will be thankful that we can be certain of!
Understanding and Paying Your Taxes
If you live and work full-time in the UK, you are liable to pay taxes. When first heading into the world of work, it can be challenging to understand what taxes you must pay and what they are used for. For the most part, you will pay a variety of different taxes, and the ones that you pay will ultimately vary based on your individual circumstances.
HMRC are the centralised government department relating to taxes, and you can expect to pay the likes of income tax to them. Local taxes also apply should you live in the UK, which tends to come in the form of Council Tax. The amount of Council Tax that you pay greatly depends on the area you live in and the dwelling you reside in.
Investors can expect to pay tax on their investments, including those in the virtual world. Individual cryptocurrency tax is beginning to apply to those who are investing in crypto in some way. Ensuring that you account for something like this within your finances by working with a cryptocurrency accountant like Hodge Bakshi will ensure a large tax bill does not catch you out in the future.
VAT is a form of tax, even if we do not view it in this way. We pay VAT on all products and services within the UK and also on some items that have been imported. In some instances, you can receive a refund on the VAT you have paid; researching the terms and conditions relating to this is the recommended action to take.
Managing your finances can feel overwhelming at the best of times. Taking things one step at a time will ensure that you do not get caught up in the process and maximise your efforts. Know that you are not the only person in this position and that by taking these actions now, you are benefitting yourself in the short and long term.