Getting control of your financial and money is about spending less than you earn and using the difference to fund savings and investments to get the miracle of compound interest working for you.
You should aim to spend less than you earn each and every month. If you already do this, you're well on your way to gaining control of your money - you just need to get the money you're not spending to start earning interest. Do this by paying yourself first: set up a direct debit into a savings account just after pay day and put that money to work right away so you don't get tempted to spend it elsewhere.
If you don't spend less than you earn, don't worry. Most of us need a little help getting control of our money. In fact, those of us who barely make it from one pay day to the next need to start with basics: budgeting.
Budgeting is neither as scary nor onerous as it sounds. To start, make a list of your regular bills and how much they cost you each month. This should give you a good idea of your main areas of expenditure. If you're not sure where your money's going, keep a spending diary: for one month, make a note of everything you spend, even if it's 40p for a chocolate bar. At the end of the month, total it all up to see how much you spend and where you spend it.
Once you know your outgoings, it's time to start cutting them. Often there's no need to cut back on the things you enjoy, but rather to get better value for money for the stuff you have to get anyway. If you're spending far in excess of your income, you will need to take more drastic steps, but for most of people, a trim should do it.
Start trimming your outgoings by reducing one major bill each month, prioritising the bills you pay on a regular basis, as with these, one phone call could lead to sustained savings. Most people can save hundreds of pounds, if not more, just by making a couple of switches. You shouldn't have to look too hard, either...
- One of the biggest expenses most of us have, after rent or a mortgage, is energy bills. You can usually get a better deal by switching energy providers - just shop around online.
-If you're a driver, you can probably save a packet on car insurance by switching to a cheaper provider - just compare online. Women drivers and drivers with clean records can stand to save the most here. Comparing online will also yield savings on journeys by rail and coach.
- Wanna have a break? However and wherever you're making tracks, you can save at least the price of a meal by shopping around before you buy. With dozens of online resources dedicated to finding the cheapest fare, accommodation, excursions, and breaks, there's just no excuse for paying too much for your holiday.
Last but not least, getting control and keeping control are different things, and there's no guarantee you won't fall off the straight and narrow at least once. When this happens, just take stock of why you fell - so you can learn from your tumble - and calmly and proudly climb back on the horse.
Posts
