How to budget and stay on top of your finances

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Financial management and everything that goes alongside it can often prove to be tremendously difficult. The process usually requires a fair amount of discipline, planning and strategising otherwise  it can be far too easy to spiral into debt – a serious problem that can sadly cause a number of challenges both in the immediate and long-term future. Potential loan customers in the UK may find themselves struggling for a loan approval when their credit ratings are low due in part to overdue debts. This is because  they are considered particularly high risk and may find it difficult to get a mortgage or business loan. Therefore, to ensure your credit score is up to scratch and your financial opportunities open as and when you need them to be, it is important to seriously consider your relationship with money. Being honest with yourself about your income, expenditure and financial objectives is a great place to start.

How can I create a budget?

First things first, what you need to do is calculate precisely how much you spend in a month. In order to be as accurate as possible, we would recommend reviewing previous bank statements so you have a good idea of how much you spend on:

  • Bills
  • Rent/mortgage 
  • Food 
  • Clothes 
  • Leisure 
  • Childcare

Once you have a firm grasp on how much you spend per month, you then need to measure this up against how much you earn per month. Simply put, it may well be that you are spending more than you earn. 

If this is the case it may be worth looking for ways to reduce your expenditure around some of the following most common but also most simple areas to change. 

How can I cut my spending on food?

There is little doubt that food is an essential expenditure. However, whilst you do need to eat, there may well be cheaper, more cost-effective solutions to doing so! Here we give some invaluable tips on cutting costs on the barest of essentials. 

  • Generic brands: Reduce your costs either by eating out less or choosing cheaper alternatives in the supermarket. It may also be far more cost effective to write a weekly meal plan that would guarantee far less waste and help keep you on track. 
  • Shopping lists: Write a list before you go shopping to ensure you are not tempted by offers or bright packaging.
  • Online shopping: Try online shopping to help prevent you from making any unneeded purchases whilst roaming the isles. 

Another essential that can easily spike your costs are utility bills. Again, we would not suggest that you go without heating or electricity, but there are ways to be far more effective in your spending. 

  • Outsourcing: Reducing your utility bills through speaking to a professional about the most effective option for you and your family. 
  • Installing LED light bulbs: These are a  far more efficient means of using electricity and could help to reduce your overall utility bill. 
  • Unplug electrical devices: When you’re not using a device, but it’s still plugged in it uses a small amount of electricity known as a phantom charge that can add to the overall cost of your bills. Turning your machines off could have a small impact, but taken over time could help reduce the costs of your bills. 

Alongside these rather common issues, we also find money is wastefully spent on: 

  • Transportation: Try an alternative form of transportation that might work out cheaper: this could mean cycling instead of driving or taking the bus instead of the tube. It may also be worth asking at work to see if anyone is interested in carpooling, good for your pocket and for the environment. 
  • Unused clubs/leisure: Check if you are spending money through membership to unused clubs (such as the gym.) 
  • Temptation: By only going out with the cash you want to spend you may well be able to cut costs and on unnecessary costs. 

Now that we’ve covered a range of pound saving picks, how do you then keep up with the actual day to day management of your budget?  If you’re not the pen and paper type, or find Excel spreadsheets a bit of a mind bender, there are a number of saving and budgeting apps that can really help when you are looking to be more careful with your budgeting. 

Some of our favourites include: 

The British version of one of the oldest and most well-known savings app, Mint. Emma allows you to stay on top of your bills through alerts whilst personalising an experience that is utterly unique to you and your needs. With handy budgets, alerts and a free credit score it could really help you improve your budgeting, 

One of the newest savings app on the market, Chip is notable as it really can help you, not only budget but save for your financial future. Once you have connected Chip to your current account it will then monitor your day to day spending and see if you have been spending less than your average. If this is the case, it will then put this money in a savings account where it can accrue interest – the amounts can be as small as £10 or £20. A fully reactive app it can help an individual save for long time financial freedom. 

You need a Budget 

This app pretty much does what it says on the tin. It allows you to connect all your bank accounts in one place, share your spending with a partner or loved one as well as offering you tools and teaching on how to save. Perhaps most impressively it also allows you to set goals and really helps you to achieve them. It even offers some bright and vibrant pie charts that allow you to track your progress. Last, but by no means least You need a budget  offer a 34 free day trial, so it may well be worth a quick look. 

Acorns help you create mountains out of molehills in the best possible way.  Essentially, the app offers you investment opportunities for even the smallest amounts. Helping you to make sure you watch the pennies so the pounds watch themselves. As if that wasn’t enough it was created by a Nobel Laureate and has already seen $1 billion invested already. One that may well be worth a look. 

Another nifty App, Pocket Guard reconciles with your accounts and allows to track your spending and saving throughout the month. However, what’s really innovative about PocketGuard is that it looks for opportunities for you to save by searching for better deals on your monthly charges.

If you are thinking about truly investing in your savings and looking to ensure you have some reserves in the case of emergencies do check out our savings page here. You never know you could well transform your dream into a reality.

LET US HELP YOU SAVE MONEY & STAY UP TO DATE!

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