7 top tips for better budgeting
With a focus on finances more prudent than ever, if you're spending more than you want to each month, or worse - more than you can afford - here are some top tips for getting back on track.
1. Write it all down
We often spend more than we realise when we don't keep track. It all adds up and knowing exactly where your money is going (and how much you have coming in) will give you greater control. Create a budget planner to have a clearer picture of your spending and where your think you can make adjustments.
2. Try using cash
Spending money has never been easier with contactless and mobile payments - sometimes all you need is a thumbprint to pay! This often means spending can become mindless. Paying with cash feels more real and once it's gone, that's it.
Try leaving the cards at home to reduce spending. You could try this for a certain period of time, like a week, or make it a regular habit, for instance, a day or two each week at times when you are likely to spend more. Give it a go and see what works for you.
3. Make an impulse shopping list
Online shopping is another very easy way to spend - usually too easy! Even when we're doing something else online, it can be hard to avoid the adverts following us around, affiliate links or recommendations from friends. And it can all add up very quickly.
If something takes your fancy, instead of being tempted into making an impulse purchase straight away, create an online shopping list and add it. You can review the list regularly to see whether it's worth it or not after having time to reflect. You'll be better able to see what items are really worth investing in at the end of the week or month, as well as plan how that spending fits in with the rest of your budget.
4. Check your bank statements
If you don't, you'll never know if you've been overcharged, are paying for something you never use (subscriptions or a forgotten gym membership for example), or in the worst case scenario, if there are any suspicious transactions. You should always contact your bank if there is something you don't recognise in case you have been targeted by fraudsters. It's also another opportunity to see exactly where your money is going on paper in black and white.
5. Try no spending days
Try a day when you don't buy anything you haven't planned for. Doing this can make you more mindful of those little bits and pieces here and there that can add up to a lot overall. You could try a couple of days, one day every week, or even an entire week or month, depending on how big of a challenge you're looking for.
6. Understand your interest
It might be your mortgage, car loan or credit card - regardless, take time to understand what interest you are paying, both as a percentage and in pounds and pence too.
It's highly likely that any interest you are paying on your loan will be more than the interest you are earning on your savings, so using your savings to pay off debts is usually more cost effective.
7. Switch
Loyal customers usually end up paying more and the only way to guarantee you're getting the best deal - from energy bills to insurance - is to shop around. Doing so can drastically reduce your bills adding up to hundreds of pounds each year.
Price comparison websites offer a quick and easy way to review many different providers and their deals. But it's important to remember the golden rule - they don’t necessarily include all providers.
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