Take control of your finances: How to stay on top

Many of us want to get better at managing our money, but once we’re confronted with bank statements and budgeting it can be difficult to know where to start. Whether you want to start saving for something special or have a few pounds to spare to avoid going into your overdraft, this breakdown can help you better understand your money and how to stay on top of your finances.

Step one: Get to grips with your incoming and outgoing payments

It’s important to first understand where your money is coming from, and ultimately, where it’s going. Bills and your mortgage or rent are of course the most important payments to account for when checking your outgoings but there are other expenses you should also make note of. Maybe you’re paying back monthly instalments on money you borrowed for an emergency or have a few subscriptions on the go. Make sure you note these as well.

Step two: Look at where you can cut back

Once you have a comprehensive list of your outgoings, see what you can cancel or cut back on. Do you use that gym membership? Do you really need Spotify and Apple Music? Look at where you can tighten the belt on your monthly expenses to free up some cash. This can help create a buffer and provide a little spare cash for everyday things. This could help you avoid the need to dip into your overdraft or it could even go towards a savings account.

Step three: Create a budget

Budgeting is one of the most important steps towards financial security and nowadays there’s lots of tech to help you make the most of your pennies. You could track everything you spend in a diary format or download an app that links to your bank account to keep note of all your expenses.

This can also give you an overview of exactly where your money is going - so you can see if you’re spending more than you perhaps should on things like eating out or clothes. Budgeting can help you become more mindful of your spending, as well as helping you stay aware of what is actually in your account so you don’t accidentally dip into your overdraft.

Tips for budgeting:

• Work on a monthly basis – Even if you get paid weekly, most of your bills are likely paid monthly. Work out how much income you receive over the course of a month as a total starting amount - this could be from your wages or any benefits you receive.
• Account for the most important expenses first - These include your rent or mortgage and bills, followed by necessary subscriptions and memberships. An estimate for food should also be included, as well as an estimate for fuel or travel costs. If you get paid weekly or fortnightly, it could help to make a note of when these bills come out of your account, too, so you can plan for them.

Once these have all been removed from your monthly amount you can see what is left to squirrel away in a savings account or use as disposable income for the month ahead.

• Try to track every day - If you miss a couple of days it can feel hard to catch up, so try to input your spending as and when it happens. If you have too much to add in after a couple of missed days, it can be hard to find the time to catch up and could tempt to you give up.

Here are some great budgeting apps to consider downloading:

Cleo - This chat bot money assistant can help you do everything from putting money in your savings to setting up a budget. It offers you insights to help you understand your spending and works via Facebook Messenger - you chat to the app as if it were a real person and it responds.

Money Dashboard - This budgeting app links to your accounts and shows you exactly where you’re spending money, helping you get a handle on your finances and budgeting.

Chip - This is another app that links to your bank accounts, this one can also help you save by taking cash without you even realising. It simply takes the spare change and transfers this into your saving account - which will soon build up with no effort from you.

Step four: Plan a no spending day

Try to make one day of the week a day where you consciously try to not spend any money. This means no buying online or eating out but making do with what is in the cupboard at home and avoiding treating yourself to anything new. You’ll be surprised at the difference it can make.

Step five: Find better deals

Switch your energy, move your broadband, downgrade your gym membership. Look around and always try to find a better deal to save a little cash. Download an app such as VoucherCodes that can help you save a few pennies on your shopping or notify you of flash sales and offers on your favourite brands. 

Step six: Seek financial advice

If you are worried about money or are dealing with debt, seek the advice of a financial expert. The Money Advice Service site has lots of helpful articles as a starting point but you can also speak to a trained financial adviser who can help you. If you do speak to a financial adviser, ensure they are registered with the FCA; Citizens Advice has more information on this issue.

Now that you have a better idea of how to take control of your finances, hopefully it will feel easier to stay on top of your money. Try out some these tips and enjoy more control when it comes to budgeting.