"I don’t have time to plan and budget properly"
Having a good relationship with your finances requires a certain amount of time and planning. Setting out a budget and learning to manage your incomings and outgoings properly is a good place to start, no matter what your income. You may be surprised at where your money goes each month, and gaining an awareness of this can make a big difference to your finances, especially when considering major financial decisions such as loans and mortgages.
Keep track of where your money goes
It’s important to keep track of where your money goes each month, especially if you find it difficult to live within your means. If you feel that you are on a tight budget, you may be surprised at how much extra you can get out of your paycheque each month just by being aware of what you regularly spend it on. A budget can be helpful, but you don’t have to write down everything you spend each month – although doing it for the first month can help you find ways to cut back on your spending. For example, when you add up the amount you spend on your morning coffee and muffin each month you may be surprised at the total; cutting this back to one or two days a week can help you save almost £50 a month. Once you know how much you spend, you can more easily start to live within your means. Set yourself a budget for your spending, dividing your disposable income after bills and savings into a few areas so that it’s easier for you to keep track. This can help you understand your money better; for example, a £300 pair of shoes might not seem like a terrible one-off purchase, but when you understand that that is your entire clothing allowance for the month you might think twice. You should also get into the habit of checking your credit and debit card statements each month, and query any transactions you don’t recognize with your bank. Getting into these habits now will make it easier if the time comes to really budget properly, for example if you decide to start saving for a deposit for a mortgage.
Have a money makeover and save instantly
You could already be throwing away money each month on unnecessary credit card interest payments and overpriced utility bills. If you carry forward a balance on your credit card each month, do your finances a big favor and switch to a new card that offers an interest-free period on balance transfers. You could save yourself a bundle on interest payments, and use the saved money to reduce the balance. If you regularly use a credit card for new purchases, or want to make a large purchase and repay it gradually, open a credit card that offers an interest free period on new purchases; these allow you to repay over the interest free period without penalty. Also, check that you are still within contract for your utilities; if your deals have ended you are probably paying increased rates as it is usually much cheaper to be locked into contract.
Shop around to save
Just a couple of minutes every now and then are all you need to check that your finances are still in good shape. If you know that you are approaching the end of your fixed rate mortgage deal, start looking out for attractive remortgage options, otherwise you will revert onto your lender’s standard variable rate, which can greatly increase your monthly repayments. Similarly, when you are coming to the end of the introductory offer on your credit cards, start looking out for a new deal to switch to, so that you avoid paying interest charges. Whenever you are looking for a new financial product, take time to compare the market in order to find the best deal; TotallyMoney searches the UK’s best deals for free on loans, mortgages, credit cards and life insurance, saving you time and money. With TotallyMoney you can speak to an independent expert for advice tailored to your unique circumstances, which can help you save money; it only takes a few minutes, it’s free and there’s no obligation.
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