If you’re still feeling the pinch after Christmas, it might be time to start thinking about reassessing your spending habits and getting your finances into shape. And if those New Year’s resolutions haven’t quite gone to plan, why not set yourself some new ones and make 2013 the year you conquer your spending and improve your finances in just 5 simple steps. Set a budget and stick to it It sounds simple, but it’s the most important step in organising your finances. If you don’t know where or how much of your money is going, it’s impossible to cut costs and make savings plans and goals. However much you earn it’s vital that you make a weekly or monthly budget plan and, more importantly, stick to it. Writing down everything you earn and spend in a spreadsheet is a great place to start.
Cut your costs
The easiest way to make sure your outgoings don’t outweigh your income is quite simply to stop spending money on things you don’t really need. Make meal plans and start taking a packed lunch to work to avoid unnecessary visits to expensive restaurants and coffee shops. Also, try to compare prices from different energy and insurance providers to make sure you’re getting the best deal. They’re just small steps, but will put you well on track to a healthier bank balance. You should also take a look at your television and broadband package and make sure you’re getting value for money – those sports channels and that superfast broadband connection are all well and good, but do you really need them?
Pay off your credit card
It’s easy to fall into the habit of flashing your plastic without thinking of it as ‘real’ money, but credit card debt is often the biggest monetary drain and can make it really hard to progress with getting your finances into shape. Pay off any outstanding debt, or try and budget to set a little aside each month to clear those bills for good. If possible, transfer the balance from one card to another that offers an interest free period on balance transfers, that way you can use more of your money to pay down the debt without forking out on interest payments.
Set up a savings account
Cushioning yourself against debt is just as important as paying it off, so set up a savings account to help protect against nasty surprises such as car and home repairs and dental bills. Set up an account with a different bank than the one that you use for your main current accounts so you won’t be as tempted to spend, and set aside a little every month to cover yourself against unexpected bills. Search around for the best interest rates and you might even find yourself with enough left over to treat yourself. And, if you’re in the savings habit, then you should also open an ISA to cover your longer term savings goals, andon offer.
Rid yourself of temptation
Keep an eye on hidden extras such as film and magazine subscriptions that fly out of your bank account without a second thought, and cancel anything you’re not getting full use out of. Have a virtual spring clean too, and unsubscribe to any unwanted newsletters tempting you to part with your money through discount codes and special offers. They’re less common these days, but make sure you cancel any unwanted postal catalogues too – it’s better for the environment and your wallet! However, don’t discount the discount codes altogether as they are a great way to save on products or services you already use and offer a great way to treat yourself to a cheap night out – which you’ll more than deserve for getting your finances into shape!
Article provided by The Finance Directory the site dedicated to bringing you the best in personal finance to help you manage your money more effectively.