Household expenses
So what can you do to manage your finances?
The main thing that you must do is to take control of your finances. I know that it is easy to say but it can also be easy to do.
What is not easy to do is to wait until you have a problem and then, in a stressful situation, to try to find all the bills and to work out what is going on!
First - reduce your costs (outgoings)
If you are going to reduce your costs you need to know what they are! An obvious statement but once standing orders or direct debits are set up they can go on for years without people realising that they are no longer getting value for money or are paying for a service that they no longer use!
The key to reducing your outgoings is to look at where all your money is going. You can then see if you are getting good value for the money that you are spending.
Second - increase the household income
This does depend upon your circumstances. Some people may not be in a position to do extra work. But many are, and there are various options for people to earn some extra cash. Another possibility is that there may be benefits that you are entitled to but are not claiming for some reason.
Control your bank account balance.
Keeping control of your money is becoming more and more important. If you make mistakes with your bank account, it could cost you money. You may have plenty of money but still go overdrawn. The banks may fine you if you make a mistake! You must take the time to control your bank account.
You really don't want to put a lot of effort to save money and discover that it was a waste of time because you end up paying bank charges or you find payments are being from your account which shouldn't be!
The buffer and emergency fund are good practices if you can afford them! Planning your finances is essential but you cannot plan how to manage your outgoings if you have reached the point where you have run out of money! You may need specialist help at that point.
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