Giving Your Finances A Spring Clean

Giving your finances a spring clean with our top tips on managing your money.

Effective money management can mean several things, from getting out of debt, to saving for the future, and is essential for ensuring the health of your finances.

Here, we give you a guide to some helpful tips for managing your money, so you can get on top of your finances and make the most of your money.

Make a Budget

When it comes to good money management, setting up a budget is a great way to start, and can help you to work out exactly how much money you have coming in and going out each month. This will help you to establish how much you can afford to be spending.

Generally, there are three main steps involved in generating a budget:

• Firstly, you’ll need to calculate your income
  Make sure you deduct tax and national insurance from this figure, and generate net figures for your total monthly income.

• Secondly, you will need to calculate your outgoings
  The next step is to work out exactly how much you’re spending. Avoid guessing as this needs to be as accurate as possible to be effective.Remember to factor in occasional expenditures, such as holidays, and not just your regular monthly outgoings, and calculate a figure for both your monthly and overall yearly expenditure. You may also want to refer to documents such as your bank account statements and bills etc. to help make this as accurate as possible.

• Find out where your money is going
  If you find that you’re spending more money than you have coming in each month, then the next step should be to look at exactly where your money is being spent, and see where any potential cut backs could be made.An easy way to do this is to begin by making a diary or spreadsheet, where you can log how much you’re spending each day and see what you are spending it on. Try doing this for at least a few weeks or so, to ensure you get a good idea of exactly where your money is going.I addition to compiling your spreadsheet you should have a look at the areas of expenditure where you may be able to make the make the biggest and quickest savings and these would include:

• Moving to a different mortgage
  Depending on the size of your mortgage, you could save a hundred pounds or more each month by simply switching lenders.

• Switch to a fixed-rate energy tariff
  Energy firms are increasing their prices over the next few months, switching suppliers now, could save between £200 and £300 per year.

• Switch your current account
  It’s well worth comparing your current bank account with those that are paying high rates of in-credit interest and who are offering attractive switching incentives.

• Compare broadband and telephone deals
  If you are with one of the main suppliers of Broadband, telephone and TV packages, you could easily slash your monthly costs by either transferring to another provider or by just haggling with your current supplier.

If you’re the kind of person who shops around for the best deal when you are buying a car or a holiday, then you could be missing a trick by not using the same skills to save money on the expenditures listed above.

If you are really worried about your current level of debt and you are looking for a way to become debt free, there are a number of solutions available that can help.