Taking control of your spending and managing your budget can be both a satisfying and stress relieving experience.
So, after you’ve spent some time going through all your finances and drawing up your budget, the next challenge is sticking to your new plan.
To make this process easier, we’ve put together five simple ways to make your new budgeting plan a success.
Track your spending
Every time you make a purchase, whether it’s the weekly shop or a quick morning coffee, make a note. This is a great way to keep on top of your spending and making sure your money is going where it should be.
It might feel inconvenient to write everything down, especially if you use cash and can’t just check your banking transactions, but it's important to know exactly what's being spent.
So, whether you use a pen and paper, excel spreadsheet or mobile app, tracking all your transactions is the best way to hold yourself accountable.
Monitor your bank statements
Make it a regular habit to go through your bank statements so that you are aware of what's coming in and going out of your bank account every month.
By checking both your statements and bills, you’ll be able to ensure that all your important transactions have been processed correctly and that there’s no suspicious or fraudulent activity happening.
Reviewing your spending will also help highlight where further changes can be made to make your money go further e.g. Unnecessary subscriptions or expensive contacts.
Reduce your bills
After you’ve checked your bank statements and have a list of all your incomings and outgoings, now is the perfect time to see where you can reduce your spending.
Start by seeing if you’re being offered the best prices for your utilities. Gas and electric companies rarely reward loyalty so by using a price comparison site, you might be able to save yourself some £££ by switching.
Next, ring up your phone, internet and TV providers to see if they can offer you a better deal or package – this works especially well nearer renewal time, and if you feel that you’re not getting a decent discount, don’t be afraid to walk away. You’re more likely to get a better price as a new customer elsewhere.
And finally, take an audit of your leisure expenses and see what changes can be made – these include luxuries such as takeaways, pamper sessions and that morning coffee. You’ll be surprised how quickly these costs stack up.
Tackle your debts
Existing debts can seem scary and tend to drain your budget if they're not tackled head on in a practical way.
Credit card debt should be dealt with as a priority, especially if you don’t have any 0% offers. With the average credit card charging APRs of around 20%*, even have a relatively modest balance could still cost you more in the long run.
Start by writing down all your existing debts along with the interest rate and term length. This will allow you to prioritise the ones which need your immediate attention (the one with this highest APR).
If you’re thinking of applying for a personal loan to consolidate your debts, be sure that you can afford the repayments, and if you have a good credit report, you’re likely to get a competitive rate.
Re-assess your budget regularly
And finally, there’s no point in having a budget and not reassessing it on a regular basis.
We all know that personal and financial circumstances can change, so whether you get a pay rise or reduce your working hours.
Your budget should always be reworked to reflect this change so you can continue to keep on top of your finances.