If you're trying to get on top of your finances, it can seem like a daunting task.
Here are 5 simple steps to help put you back in control of your money, and get into good financial habits that will last longer than the average New Year's resolution!
Step 1 - Know what you’ve got
The first step to sorting out your finances is understanding exactly how much you’ve got coming in and going out each month, and what you have or don't have in the bank. Check out our guide to getting started on your financial plan to find out more.
Step 2 - Set a budget
Now that you know how much you’ve got to work with and where your money goes each month, it’s time to set a realistic budget that you can stick to. One way to do this is to think of your spending as falling into different categories. You could have categories like groceries, clothes shopping, eating out - as many as you think you need. Next you can set yourself a spending limit for each category.
Check out the Your Wealth guide to budgeting for tips on making a potentially really useful budget.
Step 3 - Keep track of your spending
There’s no point in setting a budget unless you remember to stick to it. To make sure you do, it’s important to keep track of what you spend and where - this can feel like a lot of effort at first, but it will soon become routine if you stick with it. The Money Hub tool could help you to do this.
Step 4 - Set your goals
As well as your day-to-day spending, it is important to think about your long term goals - once you know where you’re going, it’s much easier to get there!
Think about where you want to be financially in 5, 10 and even 20 years time - do you want to build up savings for your children? Perhaps you want to clear a debt or secure a comfortable retirement? Once you know what you’re aiming for, you can work out a plan to set aside some money each month and watch your savings grow.
Step 5 - Stay in control
Most of us have a lot more going on financially than simple income and outgoings. With pension plans, savings, investments, loans, credit cards and other pressures on our finances, it can be difficult to stay on top of it all. One of the keys to staying financially healthy in the long-term is keeping up with changes to your financial situation and planning ahead to meet them - take the time to sit down and assess your situation regularly.
Why not take the pressure off?
If all of this sounds difficult and time consuming, that’s because it is! Money Hub from YourWealth.co.uk allows assess net worth, budget, track your spending and can even help you plan to meet your long term goals. Best of all it’s free to register!