How to Start Taking Control of Your Personal Finances 

If your finances are in a mess, it can leave you feeling stressed and worried. It is important that you start taking control of your personal finances as soon as you get the opportunity. When you control your finances, you can begin working towards savings goals. You can start to push forwards and build a safety net. To take control of your finances, you must be proactive. Plan for the next few months, not just for the next few weeks.

Look at Your Outgoings

Begin by looking at the outgoings you currently have. What are you spending money on, and where is your money going? You may have more outgoings than you realize, and this may be stopping you from getting on top of your finances. Outgoings can be minor such as daily trips to the grocery store for a takeaway lunch, or they can be larger, such as utility bills. If you use credit cards, then track your outgoing by looking at previous bills. If you spend a lot with your debit card (or with a daily checking account), remember to go over this with a fine toothcomb too.

Pay Off Debts

After looking at your outgoings, it is then time to start looking at how to pay off any debts you have. Bad debt (money that is owed with high charges and high rates on top) can hinder your personal finances and hold you back. Therefore, you need to start paying off this bad debt first. You may find that you must save up to pay the debt, or you may find that you have to make cutbacks with your daily spending. Short-term sacrifices such as giving up your morning cup of coffee on the way to work can leave you debt-free sooner.

Top Tip: Look at debts as soon as possible. Small debts with large interest rates attached to them can be just as costly as larger debts.

Create a Household Budget

Now you have established what debt you have and what your outgoings are, you can start formulating a household budget. A budget is going to allow you to control your spending in many areas. It will cover how much is coming into your home and how much is going out. With a budget, you can allocate set amounts for spending on cars, vehicles, grocery shopping, and clothing purchases. Without a budget to work with, you may find that you end up overspending and paying more out than you are bringing in each week or month.

Budget For Your Car

Cars and vehicles can take a big chunk out of your budget each month. Sometimes it is better to look at budgeting for your car as a separate entity. When you do this, you can always ensure you have enough cash to pay for car maintenance bills, insurance, and other associated running costs. When you are creating a budget for your car don’t forget to include one-off payments such as insurance as well as regular costs such as fuel.

Top Tip: Regular checks and maintenance of your car will help you spot any problems or issues. Dealing with these issues and problems efficiently will save you money.

Claiming Back Money Owed

As you sift through your car documents and personal finances, you may find that you are owed money. If you have a diesel car, you may find that you have the right to carry out a diesel car claim. You may be entitled to a claim if you have purchased a diesel vehicle in certain years or if you were misled by the manufacturer about the emissions (at the time of purchase). As well as looking at claims relating to your vehicle, you may also want to make sure you are not entitled to any refunds from providers. You may be owed a refund if you have been overpaying on your utilities or on your insurance premiums. Go through your paperwork for all the policies you hold and the bills you pay, and see if there is any money owed to you that you can claim back.

Looking at Ways to Earn Extra 

Now that you have established ways to save money (and claw some back), it is time to look at how you can earn a little extra. Extra money earned can be put into a savings net. This savings net can then help you effectively manage your day-to-day spending. If you have a full-time job that you are holding down, then look at work you can do in your free time. For example, could you pick up some shifts at a local coffee shop? Or could you pick up any freelancing work that can be completed in the evenings or at the weekends?

Start Planning for the Future

Getting control of your personal finances is one thing, but retaining control is another. To ensure this happens, you need to start planning for your financial future. Decide what you want your financial future to look like and start setting goals that you can work towards. For instance, can you start saving monthly towards a larger saving goal? Can you use those savings made on cutbacks towards your pension pot? Planning for the next few years (and longer if you can) will give you great freedom and control.

Create a Safety Buffer

At all times, it is important to have a savings buffer to fall back on. This safety buffer or safety net will make sure that you never get into debt. When you are creating a safety buffer, think about covering your costs and expenses for at least 3-6 months. Thinking about how much you need to have to cover expenses, if you should lose your job (or income) is essential. Also, factor in how much you would need to cover household spending and expenses. A safety buffer will give you peace of mind, and it will stop you from worrying unnecessarily about your personal finances.

Will Fastiggi
Will Fastiggi

Originally from England, Will is an Upper Primary Coordinator now living in Brazil. He is passionate about making the most of technology to enrich the education of students.

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