With uncertain times ahead, it’s important that you stay on top of your financial accounts and ensure that you’re always saving for a rainy day. Now the furlough scheme is coming to an end, there are fears that jobs are at risk. While this might not be applicable to you, with the economy tanking, it’s still important to save money where possible.
So this really is the time to get on top of your finances and make sure you have a complete understanding of your personal accounts. Not sure where or how to start? Check out the below:
1. Make sure you know how much is going in and how much is coming out
Do you really know how much goes in and how much comes out of your account every month? If you’re always fighting to stay out of your overdraft, chances are, you don’t! But it’s ok – there are lots of tools out there to help you manage your finances. I prefer to use this Cash Flow Calculator because you can drop in your income and all your outgoings. Then you just have to scroll down to the bottom of the screen to see how much you have left each month for spending.
And that’s your very first step for this task: work out what all of your direct debits are and add them up. Most people spend more than they earn on their spending money because they just don’t know how much they have! Plus, xpenditures which aren’t fixed every month (like eating out and food shoping) can tip you over the edge.
2. Review your direct debits
When you’re working through all your direct debits, work out where you can save. Be aware of anything which is duplicated. This happens most often in insurance. For example, you could be paying for phone insurance via your contents cover and have an extra outgoing for insurance from your phone provider. Cancel the ones you don’t need right away!
3. Ensure you’re not overpaying on overdrafts and credit cards
If you often find yourself in the red, chances are, you’re also paying for a credit card or overdraft. I managed to move my entire overdraft onto a credit card and THEN move that credit card onto a 0% one. I personally use the Natwest card, but there are lots out there. Now, I don’t pay a penny for my debt and anything I would have paid goes straight on my credit card! Here are the best 0% credit cards from Money Saving Expert.
4. Work out where you can cut costs
Think you can’t reduce your spending? Trust me, YOU CAN! Whether it’s quitting smoking or taking lunches into work, there’s always a way you can reduce your expenditure. To put it in perspective, this tool shows you just how much you can save simply by taking sarnies into the office.