In the UK we are used to funding our lifestyles on credit. But what if you find paying your debts is becoming a significant issue? There are three key money management tips you should take to heart. 

• Understanding your income and outgoings
• Getting your expenses under control
• Stick to your budget using a tried and tested method

Rather speak to a person? Call 0800 077 6180 or fill in the form below and we’ll call you

How to really understand your income and outgoings budget

This sounds like common sense. However you would be amazed at how many people simply have no idea about what money they have coming and going out each month. Get on top of it by following these simple steps:

Make a list of all the money you have coming in each month. If you have different sources of income (for example wages, benefits and or pension) make sure you list them all. If you receive a payment every 4 weeks, divide by 4 and multiply by 4.33 to get an average month.

To understand what you are spending list out all of your monthly household expenses. When everything is down on paper, you might be surprised at the total figure.

You can then compare what you spend to the money you have coming in. This will show you if there are potential problems and whether or not you need to start tightening your belt.

Download our living expenses guide to get a comprehensive check list of living expenses you need to include in your budget.

Getting your living expenditures under control

Having understood your income and outgoings budget, you may find that you need to reduce your expenditures in order not to overspend. There are many areas you might want to consider to achieve this.

– Can you get a better deal on your electricity, gas and telephone charges?
– Are you paying for insurance each month that you no longer need?
– Can you cut out subscriptions to services such as sky and the gym which you simply never use and could easily do without.

You may find you cannot reduce your expenses any further but you are still do not have enough income each month to cover your unsecured debt payments. Where this is the case you will not be able to resolve the situation by better money management.

If you are struggling with your debt payments don’t bury your head in the sand hoping the problem will go away by itself. It never does. Give us a call (0800 077 6180) and we can help you understand your options.

Money Diary – The tried and tested method for sticking to your budget

Good money management will mean you have sufficient income to cover your household expenses every month. However, unless you have process in place to ensure you do not spend over your budget you will never achieve this.

I recommend you keep a money diary. It works like this: At the start of the month, list the income that you know will come in. Next, deduct all of your known fixed expenditures (regardless of when they are actually paid). You can copy these from your outgoings budget (see above).

The remaining balance is what you have to spend on variable expenses like groceries or clothing (or save) for the rest of the month. Each time you spend further money (even if you draw cash), deduct it from the balance in your money diary. In this way, you will be able to see clearly at any point what you have left to last you until next pay day.

The best way to live within a budget is keeping a money diary. A record of everything that you spend each month as you spend it.