There’s only one rule for peace of mind when it comes to managing money, and it’s this: Spend less than you earn.
Of course, that’s easier said than done, especially during times when we’re all feeling the pinch and it’s impossible to turn on the TV or open a newspaper without hearing about ‘cuts’, ‘cuts’ and ‘more cuts’. What happens when there’s nothing left to cut? Firstly, don’t give up. Check our five top individual money management tips.
ExpenseOnDemand: Your friend in need
At ExpenseOnDemand we know how hard it can be to manage money . It’s why we created our app for sole traders to be on top of their expense control – but here’s our secret double bonus: not only does it work just as well for private individuals, but we’ll give it to you for nothing. You can download it here now, and use it in our first tip.
1. Be certain where your money goes Keep a spending diary using Make a note of everything you spend – and we do mean everything, because only when you know what you’re spending are you in the best position for managing expenses. You can photograph the receipt , type in the detail, or even create a voice recording on the spot. When you create a report using the free download app (it’s really easy to do) you’ll be able to see what you actually spent, which is likely to be more than you thought you’d spent.
2. Separate out the ‘must-pay ’ items There’s not much you can do about fixed costs like rent, for example, but thinking outside the box can make a difference to things you thought you might not be able to change. For instance, are you paying council tax? If you are, and you live alone, you could get a 25% discount. Talk to your local council; they’ll be helpful. What about switching energy supplier? We know someone who did that and saved £25 a month immediately. The same goes for your phone tariff. You may be paying for more than you need, and you need to ask to change to a more cost-effective one if that’s the case. Do you have a landline as well as a mobile? You probably don’t need both and you certainly don’t need to be paying for both! What about your TV? Your could ring that provider too, and seek a cheaper package – or what about doing away with that completely, and just having the free channels?
3. Examine non-essential items
On food: do you buy branded items? Why? Try other, cheaper brands. You might be surprised at how similar (or even better) they taste. Shop at the low-price supermarkets, which are enjoying a boom in customer numbers at the moment. All those shoppers can’t be wrong; go along and find out what the attraction is. Don’t shop for food when you’re hungry. If you do, you’ll buy things you don’t need (and perhaps can’t even use) as a result. Plan menus ahead of time, and buy what you need to put them on the table. Make meals like Granny used to; perhaps a chicken would be at the heart of a roast dinner, which would mean a stew the following day, and then a soup made from what was left with a few diced vegetables. You could get a recipe book for pennies from a charity shop.
On clothes: Speaking of charity shops, they have some really good clothes available (my favourite purple pullover went to one; I had no choice after I’d stupidly put it in the tumble drier. It came out wonderfully soft, but several inches too small.)
On transport: If you have a car, make sure you have the cheapest insurance by shopping around. If you use public transport, check out the cost of weekly tickets, which could be cheaper than paying for journeys individually.
Generally: Buy in bulk. As a rule the unit cost will be lower, so you won’t need to buy so often. Don’t do any washing until you have a full load. Scout around the house for stuff that you don’t need, like outgrown kids’ clothes or toys that are no longer played with. Sell ’em on eBay.
4. Work to a budget Know what you can spend, and work within that limit so as not to make things any worse. Be proud of yourself for trying.
5. Don’t struggle alone Being in debt is a frightening place – but there are places you can seek help. The UK government’s money advice service is a good place to start, and therefore sure to be someone local who can advise you about your particular circumstances. Remember, talk’s cheap, and there’s loads of advice at the Money Advice Service web site.
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