The basics of money management

Managing your finances can be a daunting task and can quickly become overwhelming if not carefully considered.

There are some tools and organisations that can help you gain a better understanding of your finances and make you feel more in control each month.

Financial budgeting

Creating a clear budget or plan for your finances each month can be the most efficient way to gain a real understanding of your financial situation and track your spending. This can also help determine how much you can or should be saving, and any surplus income you may have. Surplus money is any amount that is left over after the deduction of your essential outgoings such as utility bills, rent and council tax, by working this out you can then decide how to maximise the benefit by putting the surplus towards debts, savings or other spending. There are a few organisations that offer free budgeting tools and advice about managing your finances:

The Money Advice Service – provides advice for money and debt guidance.

England, Wales and Scotland: 0800 138 7777

Northern Ireland: 0800 328 0006

The Money Advice and Budgeting Service (MABS) are an organisation based in the Republic of Ireland that offers free, impartial personal debt advice. Contact Number: 0761 07 2000

Reducing spending

Reviewing your current direct debits and outgoing bills can help you gain a better understanding of any unnecessary services you may be paying for and any potential to cut back costs. It is easy to allow direct debits and contracts with providers to automatically renew without considering alternative options that may be available, but automatic renewals often cost you extra. Organisations generally give better rates to new customers whilst increasing costs for existing customers. Therefore, taking the time to consider alternative services and brands could help you to save overall. Here are a few options to consider:

Energy suppliers: It may be worth reviewing the cost of alternative providers as many organisations will offer lower rates for new customers. Additionally, a lot of energy providers use incentives to encourage new custom, these can include shopping vouchers or an initial rate reduction period.

TV and Broadband: Switching your providers could help you save as many organisations offer deals encouraging new customers. Also, consider which TV subscriptions you really need, it’s common for individuals to pay for TV services that they rarely use. Additionally, some providers are offering free popular subscription services such as Netflix which can cost between £6-£8 per month.

Food Shopping: We are all accustomed to certain brands and often find it challenging to switch to anything outside the ‘usual’. The consensus is that if something costs more it must be better. However, this is a tactic used by supermarkets to make you spend more and the own-brand products are usually of similar or equal quality as branded items.

Debt guidance and information

Managing debt can be overwhelming and it can feel easier to ignore the issue, however it is always best to try to deal with money worries at the earliest opportunity. There is a range of platforms that can provide expert debt advice and offer you solutions depending on the type of debt you have.

Step Change – Provides free debt advice and debt management information.

England and Wales: 0800 138 1111

Northern Ireland: 0800 138 1111

Republic of Ireland: 1 800 937 435

Savings goal

People can focus on collating savings when they have a large purchase to consider such as a property or car. However, saving regularly can provide you with some security for emergencies such as redundancy or property repairs. Try to aim to save a proportion of your earning each month even if this is not a substantial amount, even a small amount of savings can create some security. When saving it is often best to consider opening a savings account as they can have reward schemes or better interest rates.

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