Control your finances the easy way

Too much month at the end of the money? Many people face the problem of running out of money before their next payday. Usually this is because they don’t take the time to organize their income and expenses and end up wondering what happened to their money. There are solutions to help you manage your finances that have helped me over the years and now I want to share them with you so that you can learn to control your finances the easy way.

MAKE A LIST OF YOUR MONTHLY BILLS

Monthly bills consist of things like rent, electricity, water, city taxes, and gas. These are bills that generally have the same amount every month. Make a list of all the bills you pay each month along with how much you pay for each one. Now add the numbers together to find out how much you are paying each month in total. If an invoice varies between two amounts, enter the higher amount. For example, if you pay between £ 50 and £ 70 for electricity, write down £ 70. You can find the amounts by reading your bills or bank statements.

Some electric and gas companies give you the option of paying a single monthly payment. This way, they can control the amount of gas or electricity you are using and adjust your monthly payment accordingly. It is good that you take this option so that you only need to add the extra money when they increase or decrease the direct debit. Companies don’t mind if you go into debt on your gas in the winter, as your payments will reduce debt in the summer months if you don’t use the heat.

CONFIGURE DIRECT FLOWS

Direct debits allow companies to withdraw money directly from your account when the invoice is due. Once you know how much you need to pay in bills each month, you can leave that amount in your account or transfer the total amount to another account if you want to use a separate account for bills. The companies will inform you of any increases so that you can adjust the amount you pay. If possible, choose the same day your payment comes out if you are paid monthly, or the closest day, which is useful if you have all of your expenses coming out of the same account.

Note: these companies can only withdraw what has been authorized so you don’t have to worry about paying extra money. There are also times when they may accept payments 2-3 days in advance due to the direct debit date being a weekend or bank holiday, so make sure your money is in your account in advance. Call the companies you pay to set up direct debits. In fact, you can save money with the direct debit method as you get the discounts offered.

MULTIPLE BANK ACCOUNTS

Your bank allows you to open multiple checking or checking accounts that you can use for various purposes, such as expenses and bills. Use one of your accounts for your monthly bills and set up your direct debits to get out of this account. Transfer the full amount of money you need to pay the bills to this account once a month and you’ll know that the bills are sorted for the month. I would recommend that you add extra money to the total so you don’t have to worry about overdrawing. It may also be a good idea to have a small overdraft on the account in case you need it.

You can also use an account for your general spending needs, like food and fuel. I recommend that you transfer your salary to this account, so after transferring the money from the bill, all that is left is yours to spend. You can also use this account as a savings account by letting your money stay there and spending only what you need. Anything that’s left of Payday can be classified as savings.

If you prefer, you can have a separate savings account where you can transfer a fixed monthly amount or have it done automatically through a standing order. Or you can manually transfer any remainder from last month. It is always advisable to have some money saved in case you need it. You never know when there will be an emergency or a situation where you need extra money. You can choose an amount that you can comfortably save and consider it a monthly bill.

ESTABLISH EXPENDITURE BUDGETS

Sometimes we can be too reckless with money. Imagine walking into the store with the children in tow and they begin to add things to the basket. Imagine seeing something on sale and grabbing as many as you can or buying something you don’t really need, but it was a bargain. After setting aside money for bills, it is recommended that you establish a spending budget. For example, you might only have £ 400 a month left, so you could limit yourself to spending £ 100 a week. Make sure you have the things you really need before you start spending and use the leftovers for treats.

You can save money by focusing on the biggest purchases of the week and buying certain things in bulk. Buying a six pack of baked beans can be cheaper than buying six cans separately. If you like to drink buy some cans to drink at home and reduce your time in pubs and bars. If you use public transportation, try buying a travel pass to save money by paying the fares separately. Try to pack a lunch to take to work. Basically, if you really don’t need it, don’t buy it.

DEBT PAYMENT

The longer you have a credit card or loan debt, the more interest you pay. If you have debt, there are ways to keep it under control and save money.

1. If you have more than one credit card, consider a balance transfer. By transferring all your credit card balances to a single credit card, you can get a lower interest rate and a lower monthly payment, making it easier and faster to pay.
2. Use the savings to pay off the debt. This will save you money on interest payments and reduce debt more quickly. If you have extra money, first try to eliminate the smaller debts to get rid of them and thus have extra money for the larger debts.
3. Consider a bank consolidation loan. You can borrow enough to pay off all your other debts and only pay a fixed monthly payment via direct debit. By reducing the amount of debt payments to one loan payment, you can end up with extra money each month.
4. If you can’t get a loan, consider an Individual Voluntary Agreement (IVA). This allows the interest on all your unsecured debt to be frozen and you pay a fixed monthly amount as much as you can afford for five years. This does not apply to secured loans such as car financing.

I hope this article benefits you in some way. Personally, I have lost a lot of money over the years due to reckless debt and spending and I have finally fixed it. I have no debts and money in the bank. And I hope it gets to this point too.