LifeFinancialWellbeing

Managing your money

Taking the time to manage your money better can really pay off. It can help you stay on top of your bills and save £1,000s each year. You can use these extra savings to pay off any debts you
might have, put them towards your pension, or spend them on your next car or holiday.

How to set up a budget

The first step to taking control of your finances is doing a budget. It will take a little effort, but it’s a great way to get a quick snapshot of the money you have coming in and going out. Setting up a budget means you’re less likely to end up in debt or be caught out by unexpected costs. You’ll also be more likely to have a good credit rating, be accepted for a mortgage or loan, and spot areas where you can make savings. You’ll also be in a great position to save up for a holiday, a new car, or another treat.

To get started on your budget, you’ll need to work out how much you spend on:

  • Household bills
  • Living costs
  • Financial products
  • Family and friends
  • Travel
  • Leisure

Just grab as much information as you can about your income and spending and get started.

Getting your budget back on track

If you’re spending more than you have coming in, you need to work out where you can cut back. This could be as easy as making your lunch at home, or cancelling a gym membership you don’t use. You could also keep a spending diary and keep a note of everything you buy in a month. Or, if you do most of your spending with a bank card, look at last month’s bank statement and work out where your money is going.

Paying off loans and credit cards

If you have loans or owe money on credit cards it usually makes sense to pay off the debt that charges the highest rate of interest first. It is important to make sure you don’t break the terms of your agreements. So even if you’re focusing on paying down another debt, you must pay at least the minimum on any credit cards and your monthly required payments on any loan agreements.

If you’ve already missed credit card or loan payments or if you’re behind with so-called ‘priority debts’ such as your rent, mortgage, energy bills, council tax etc, take advice from a free debt advice charity straight away.

Set a savings goal

Some people find it hard to get motivated about saving, but it’s often much easier if you set a goal. Your first step is to have some emergency savings – money to fall back on if you have an emergency, such as a boiler breakdown or if you can’t work for a while. Try to get three months’ worth of expenses in an easy or instant access account. Don’t worry if you can’t save this straight away, but keep
it as a target to aim for. The best way to save money is to pay some money into a savings account every month.

Once you’ve set aside your emergency fund, possible savings goals to consider might include:

  • Buying a car without taking out a loan
  • Taking a holiday without having to worry about the bills when you get back
  • Having some extra money to draw on while you’re on maternity or paternity leave

This guide is intended as guidance only, and is not financial advice. For financial advice please speak to a qualified adviser.
Ammonite is an appointed representative of Julian Harris Financial Consultants Ltd, which is authorised and regulated by
the Financial Conduct Authority.

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