For many people, money management can be a daunting task. One basic, but very important rule to managing your money is to not spend more than you earn. Major overspending can swiftly send you into debt, creating severe financial problems.
Create a budget planner
A practical way to start a budget is to keep track of all of your funds coming in and going out, taking into account utilities, taxes, insurance and loan payments. Log a budget planner and record all of your receipts, listing your expenditures for the coming months; everything from food to clothes and social activities should be accounted for. Compare your earnings (ensure it’s your actual take-home pay after income tax) with your outgoings to get a sound surplus amount.
If you’re on a tight budget try and cut back on luxuries like eating out, buying gifts or that bottle of wine. While you focus on spending less, consider alternative sources of income. Sell any unwanted items online or at a car boot sale, or take up a part-time job. Put a back-up fund aside for emergencies and invest money into a savings account that’s not easily accessible. Try to avoid late payment fees and incurring interest on your accounts – unnecessary charges all add up.
Managing your money
Learn how to manage your money - be disciplined in your approach until you’re back in good credit. Prioritise the necessities and don’t overspend, and if you don’t feel confident managing your money alone, consider speaking to an expert. Check your finances on a regular basis. By budgeting effectively you can maintain a healthy bank balance and keep the debt collectors at bay.