With the New Year being the ideal period for looking to the future, now is the perfect time to get serious about your finances.
After the excesses of Christmas, January can be a difficult month financially. Experts believe as many as one in four adults could potentially struggle to get by.
Sorting your finances can seem daunting, but here are three simple steps to taking back control of your finances this January.
Step 1 - Create A Budget
A budget is the first step towards having control over your finances because it helps you work out exactly what position you are in.
A budget should list all the things that you plan to spend money on each month, and the amount of money that you have coming in. This allows you to see how much money is left once you have paid all your essential bills, expenses, food, and transport for the month.
What is left can then either be spent, put towards reducing any debts you have, or saved for the future.
Step 2 – Cancel Subscriptions You Are Not Using
Seeing all your expenses in one place can also help you identify any areas where you can cut back.
Many of the goods and services we spend our disposable income on are paid for via direct debit or subscription. The amount of monthly direct debits or subscriptions that the average user has is on the increase as ecommerce changes the way we buy things.
Whilst this is convenient, it can also result in you paying for services that you are not using.
Create a list of all the services that you are currently paying for monthly automatically. Then go through the list and cancel anything that you don’t need any more, or are not using.
Step 3 – Check The Price Of The Essentials
No matter how much you cut from your budget, there are always things you are going to have to pay for each month such as the rent/mortgage, utility bills, and transport to get to and from work.
The New Year is a great time to compare what you are currently paying to what else is on offer in the market place. Whilst reducing your rent might be difficult, if you own a home with a mortgage you could find a better deal is available from a different provider.
Utilities are also highly competitive, and the New Year can see prices go up, whilst other companies are offering deals that cost less or guarantee to fix the price you pay.
Take the time to compare and you could be able to reduce your monthly outgoings significantly: shopping around can make all the difference.
Dom Education Group (C) 2016