by Clare Evans
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Do you find it hard to get by each month and your spending is either out of control or starting to head that way? If you're struggling with money then don't despair, you can get back on top. If you'd like to have more money each month or want to get control of your finances here are a few tips to help you get on top of things and start getting your spending back under control.
When it comes to money we tend to fall into one of three main categories: spend less than we earn, spend what we earn, spend more than we earn.
Create some good financial habits by taking a look at where you are now. Where would you like to be? Follow these tips to help you get there.
- Keep a money diary for a week. It can be surprising where all the 'cash' goes. You probably don't really think about it on a daily basis. After all you probably just go to the bank when you need more and if you're lucky and your account is still in credit, you get what you request. But what exactly do you spend it on? Where does it all go?
Keeping a money diary can help you get an idea of the flow of your cash out of your bank account. Whether it's cash, cheques, cards or just those monthly bills.
Get a small notebook, carry it with you and write down every single thing you spend, as soon as you spend it, every day for the next week. Every bill, standing order, newspaper, snack, bus fare, coffee ...
- Your monthly expenditure. Work out what you spend monthly on everything: rent/mortgage, utility bills, food and essentials, meals out, entertaining, clothes, holidays, presents, credit card repayments etc. etc.
Gather together all your salary slips, receipts, bank statements, credit card statements, details of loan payments, mortgage, you money diary, etc... - anything which shows money coming in and money going out. Include any direct debits or standing orders from your bank accounts.
Including the basics, compare your total outgoings with your income. Where's the fit? Are you overspending?
- Create and Emergency Survival Fund. How much do you need to pay for the basics like mortgage, rent, insurance, bills, food and car each month? Aim to save at least three times your basic monthly outgoing that you need to survive.
Should the worst happen and you lose your job, go sick for a period of time or decide to have a change of career, you will have a financial cushion to support you. Place it somewhere with easy access but with
- Reduce Your Debts. How much is your debt actually costing you? Decide that today is the day you're going to take responsibility and you put yourself in a much better position to do something about it. What would you rather be spending that money on?
How many debts do you have - loans, outstanding credit cards etc? What interest are you paying on them and over how long? How many payments are outstanding and how much will you end up paying in total?
If you can create some spare income each month can you put it towards 'busting' some of your debt.
- Save 10% of your income. Pay yourself first. As a minimum put aside at least 10% of your monthly salary. Set up an automatic payment straight out of your bank account into a savings account.
Initially, place it somewhere with easy access, preferably earning the highest rate of interest available. Never under the mattress! You never know when you might need it and you're starting to invest in your future. The only way to get rich is to save and invest! Start thinking long-term for your savings - five years or more, not just saving for the next holiday.
- Become a Savvy Buyer. Always take a little bit of time and effort to shop around for the best deals - don't just buy the first thing that comes along. How often do you check out the best deals available for insurance, mortgage, fuel, credit cards? Check out all the brokers and online insurance companies for the best quote.
Use cost comparison sites such as www.kelkoo.com or www.dealtime.com. You can also save money by switching to a different energy supplier via sites such as www.uswitch.com.
- Get Sound Financial Advice. While you can discover a certain amount from newspapers, magazines and the Internet, it's always worth discussing your financial requirements with someone who knows what they're talking about.
Talk to a Financial Advisor. They usually offer a variety of products from different companies. Find someone by recommendation or have an informal chat with one or two, to find someone you feel comfortable with.
Make sure you are clear about what you want from your investments. Are you looking for growth, future security or an income? Your requirements may change over time.
Use these tips and you're sure to get better control of your money.
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