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How to Get a Grip on Everyday Finances

Updated: Jan 31

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Well, Hello there!

How to get a handle on everyday finances

Have you managed to add any of the frugal living tips to your New Year resolutions? If not, don't give yourself a hard time!

Dealing with money, especially when there never seems to be quite enough, is a stressful and serious business for lots of us.

Managing money better can help reduce anxiety, making you feel you have more control and leading to a brighter financial future.

Let's get to it!

Reasons to Budget

There’s a huge difference between just cutting down because you can’t afford something and setting things out so you can see exactly what you’re spending and where you’re spending it.

Active budgeting has distinct advantages:

  • You’ll have less debt, avoid building up more and reduce what you already have.

  • Your credit rating will improve.

  • You’ll save more.

  • You’ll be in a better position when asking for a loan or taking out a mortgage.

  • Unexpected expenses will be fewer, and less shocking if they do crop up.

5 reasons to start budgeting fairly frugal

How to Start a Personal Budget Tracker

Sometimes even the word ‘finance’ can be a bit off-putting because it conjures images of investment portfolios, stocks and bonds, yields, percentages, and accountancy that don’t have much in common with planning the family grocery shop or affording new clothes.

But finance is everything to do with money, whether you’re spending a fortune or a few pounds. It’s not hard to learn about accounting and a simple personal plan is a practical way to start.

So, grab a notebook and pen, or fire up a spreadsheet on the computer. You’ll need just four columns:

  • Date - to note down when a transaction happens.

  • Item - list exactly what you bought, or where the income came from, such as wages. It’s very important to track income as well as spending.

  • Cost: the amount you spend or earned.

  • Balance: Add or subtract the amount in the ‘cost’ column to keep this one up to date.

Pull up your online banking records and have a look at your current balance. Write this amount at the head of the ‘Balance’ column to start things off.

While you’re looking at your bank account or statement, remember direct debits or standing orders are still to come out. Don’t forget to add those to your personal tracker. It’s easy to forget those things and put your balance out of sync.

Every time you spend or earn money, make a note, being as precise as you can. You could update your tracker daily or save receipts and spend an hour a week catching up.

If this sounds like a lot of work, bear in mind you don’t have to keep it up forever if it drives you mad. Just doing the exercise for a couple of months will give you a much clearer picture of your spending patterns and habits.

Using Your Numbers

Using your tracker, you might have already made some spending changes because impulse buys are less attractive when their effect on your balance is in the back of your mind.

With your figures in front of you, you can start really digging into where your money is going.

Look for:

  • Subscriptions. These can really eat into your budget and give little back. Magazines, clubs, subscription boxes, software, insurances for products.

  • Most expensive categories such as a mortgage, rent, utilities, groceries, cars/fuel.

  • Basic everyday items, such as workday lunches, coffees with friends, toiletries or entertainment.

Once you start seeing some patterns in your spending, you can work out where it makes the most sense to cut back.

You could cancel subscriptions you don’t need or use. Get rid of small payments on product insurances, especially if you’re still paying those direct debits on items you’ve forgotten you ever had.

Tackle the big things, like credit cards and loan payments, and look for cheaper deals on regular outgoings, such as mobile phones. If you’re in a contract, find out how much it would cost to get out of it. It might be less than you think, and any savings on a cheaper deal or pay-as-you-go could balance things out over a couple of months, then cost less going forward.

Don’t discount small savings. Little things add up, often significantly.

Practical Tips for Quick Savings

  • Get a loyalty card for the supermarket you use most. They often give cardholders special discounts or money back after spending a certain amount.

  • Switch to an interest-free credit card, and actively reduce the balance by overpaying every month.

  • Give yourself an allowance each week that you can spend on random, little things without feeling guilty about ruining your budget. Set up a separate bank account for your ‘pocket money’, like Monzo or Starling.

  • Use family subscription sharing on things like streaming services on TV, sharing the cost between you instead of everyone having their own.

  • Be sceptical about BOGOF offers. Work out for yourself if it’s a real saving because sometimes, it’s not.

If money makes you anxious, starting a project like this can be tough. But once you start seeing the benefits, it can become liberating and fun. When you develop an interest, it could even lead you to a new, rewarding accounting career. You’ll already have the basics to build on.

But even if you don’t take that path, you’ll be more money-confident and have healthier finances for your future.

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A few words about Fair

Fair is a vintage gal on a journey to find financial freedom. She shares her best tips with you, so you can achieve the same goal, whether it is saving money or looking fabulous!

Fair has featured in National and Local newspapers with her money-saving tips.

If you would like to learn more about Fair and how she measures wealth by the number of socks she owns, click here.

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