Want to get your finances sorted out in 2017? Christmas is the most expensive time of year for most of us, and so tightening the belt in January as well as considering our money for the year ahead makes good sense when a new year rolls back around. If spending your money better next year is one of your goals, here’s how you can go about it.
Write Down Your Income and Expenditures
Knowing exactly what you have coming in and exactly what you have going out each month gives you much more control over your money. Start by writing down every expenditure you have to cover each month- this includes everything from bills to food to travel and any other important extras. First, take a look at the list. Is there anything you can cut down or reduce? Do you really need to spend £10 a day on coffee and lunch or can you buy a flask and pack your own food for work? Do you need the biggest bundle for your phone or internet packages, or could you phone up and get these downsized? All of this extra money will all add up. Then write down everything you have coming in, wages, benefits, investments and anything else. Your ‘money in’ should be more than your ‘money out’- if not you have a problem on your hands and will continue falling behind with money. If that’s the case, read on.
Get Debt Under Control
Debt has a lot of stigma attached to it, which can mean people hide their problems and don’t reach out for help. All that happens then is the debts continue to spiral and get worse. There’s no shame in having debt, whether it’s a result of bad decisions (we’ve all made them!) or just circumstances, the best thing you can do is address the issue as soon as possible. If your financial situation is short term, for example, you’re between jobs but are likely to get another very soon, call your creditors and explain the situation. They will be much more understanding rather than just outright missed payments! If debt issues are likely to be more long term, speak to a debt company or charity. They may advise you to enter a debt management plan or an IVA, or in extreme circumstances file for bankruptcy. Either way, getting these under control quickly means you regain control of the situation rather than it continuing to get worse. Alternatively, in certain cases, it might make sense to get a consolidation loan or card. Here you can pay off all of your creditors with the amount, and then you only have one payment to make for debt each month instead of many. This allows you to avoid high-interest rates and could be a way of managing your debt without entering a formal plan. You will need to have a good enough credit score to be accepted for a loan or a card with a high enough amount on. If you’ve already begun missing payments it might not be an option. You could find out your credit score to see if it’s a possibility.
Stick To a Budget
Regardless of how much or little money you have each month, a budget is always worthwhile. It stops you from overspending and means your money is being put to its best use. If you’re in debt, any extra money can be used for paying this. If you’re not, any additional money can go towards savings rather than just being wasted. Set a sensible budget for things and stick to it. If you’re going on a day out or to a social gathering, decide on how much you’re going to spend. If you need to buy something new, work out a realistic budget and stick to it. Whether it’s big or small, going into situations knowing exactly what you want to spend and what your limit is prevents you from going overboard.