A back to basics look at how to better manage your money
Creating and working to a budget is helpful for a number of reasons, least of all it can help to give you peace of mind if your finances are starting to feel overwhelming. But, if you find yourself at a loss of where to begin, here are 5 tips to get you started…
Budget Tip 1: Take a bird’s-eye view of your finances
Budget Tip 2: Keep a money diary
It’s so easy to spend a few pounds here and there on snacks, car parking, or coffee throughout your day. These may seem like small amounts at the time but can easily add up to a significant sum. Jotting down each time you make a small purchase will paint an accurate picture of your spending and will make you think twice the next time you go to tap your card.
Here’s the thing; sometimes it can be difficult to get a proper overview of your financial situation when you’re living it every day.
But, taking a step back and narrowing down your incomings and outgoings so that you can see what you're spending over the course of a single month can give you the perspective you may need to assess your situation and draw your attention to any unnecessary spending.
Budget Tip 3. Use the right budgeting tools for you
If you're a Cabot customer and your debt feels overwhelming, the Cabot Budget Planner is an excellent way to get to grips with what you are spending every month so that you can create an affordable solution to clear your debt.
Additionally, there are a number of excellent free and secure budgeting apps available for iOS and Android, such as Money Dashboard, which allow you to track and record your spending.
However, sometimes you can’t beat a simple spreadsheet, you can easily record your incomings and outgoings in Excel or Google Sheets. List any incomings after tax and every Direct Debit and standing order you have on your accounts - make sure you note the date your bills are set to leave your account. It’s also helpful to note the frequency of your expenditures as some bills, such as car insurance, tax and home insurance, may be paid less frequently. A basic spreadsheet layout will add up everything in your outgoing column and take it away from everything in your incoming column so you can get a true figure of what you have left over each month, also known as your disposable income.
Seeing everything in one place will show you where the majority of your spending is going and give you a focus area when it comes to trying to reduce your outgoings.
Budget Tip 4. Dig up all of your subscriptions
Many of us have subscriptions to services that we’re not aware of or we have forgotten about. Subscriptions to entertainment streaming, newspapers, magazines and workout classes can easily mount up over the years.
The easiest thing to do is to log into your online banking and select the option to see all of your Direct Debits and standing orders. Some subscriptions, such as entertainment passes or Apple music are billed using a repeat card payment every month and won’t be listed on your online banking app like regular Direct Debits or standing orders. This makes it easy for you to miss a regular subscription you may have set up, so it’s worth taking a look through your statements. If there are any there that you don’t recognise or understand, give the company in question a call.
Budget Tip 5. You’ve heard it before but, renegotiate your services
Once you have completed your budget sheet you should be able to see where you are spending the majority of your money. There could be savings to be made if you were to negotiate some of the items on your list.
- Look at your mobile contract, you may be able to find a better offer elsewhere if you’re not tied into a lengthy agreement. Even if you are, it’s worth giving them a call, you may be eligible for new terms.
- Check your mortgage rate to see if you’re currently on a deal or if you are on the standard variable rate. Always look elsewhere for the best interest rates when it’s time to remortgage.
- Contact your energy and media suppliers to see if a better deal is on the table.
Links to external websites are not under our control and are provided for information purposes only. We do not endorse or take responsibility for the content within third party websites or the reliability of those websites and we are not liable for any loss or damage that you may suffer by using those websites.
Creating your own Budget Planner
This is a great way to get fully acquainted with your spending, learning what your main expenses are and where you could potentially cut down.
2 minute read