This time of year is one of the most common times that people really start to look at their finances a little closer. With Christmas and Ne...

This time of year is one of the most common times that people really start to look at their finances a little closer. With Christmas and New year being the most likely time for people to add their debt January tends to be the month where the need to assess and digest your finances is much needed. Whether you want to become debt-free, save for a large purchase or just have a little extra spare money through the year for holidays or house projects getting a handle on your finances is where it needs to start. 

Photo by maitree rimthong from Pexels

It can be quite daunting to think about your finances especially if you and your family have fallen into the habit of living month by month with no saving or spare funds. However, delving into your finances in depth is the best way to move forward and become successful in the management of the household money. 

If you want to start to manage your finances better and forward to a future that is well managed have a look below at some of the ways you can get a good handle on your finances this year: 

What’s Coming In And Out? 

The first thing that you need to do is look at what funds you have come into the household and what funda you have left on a monthly basis. This means looking at both yours and your partner’s income, any child benefit you receive, any benefits you receive and then any other source of income such as child maintenance or tax credits. Total them up and you will have the figure of your total household income. You then need to look at your monthly outgoings. The key with this is to always include the worst-case scenario. So, if you sometimes spend £100 on petrol but the next month you have £150 always use the higher figure, this way you won’t fall into any nasty surprises. When looking at the money that has to leave your household, to start with leave out any debts that you’re paying other than those that are considered a bill, such as your mortgage or regular credit card payments. You can look at debts at a later time. Once you have both figures deduct your outgoing from your income and you’ll be left with your disposable income. Your disposable income is what you will use to pay off debts, enjoy days out and treat yourself from time to time. When looking at your monthly outgoings don’t forget to include things such as your toiletries, a few days out, eating out, your food allowance and clothing for you and any children. If you’re ever stuck on what to include there are many different lists available to use online. 

Look At Your Debts

Although it can be frustrating and a little daunting to look at your debts in depth it’s a good idea to know exactly where you stand. Even if you have a high amount of debt to repay, excluding your mortgage or car payments it’s still better to identify all of the money you owe. You should always have a good line of communication with anyone that you owe money to, you will find that having a good line of communication means that they’re more pleasant able to work with you to find an ideal solution to get debt clear. They will understand that living costs are high, and may request that fill out an expenditure form. This is where already looking at your finances is useful as you will already know how much disposable income you have to allocate to any debts. At times it may be a better option to look at things such as debt consolidation loan so you’re able to consolidate your debts into one easy payment however you do need to have a relatively decent credit rating to do this. If you consider this option make sure you always have a look at the secured loan FAQs section to understand what you’re applying for. Dealing with your debts in a proactive way will not only improve your credit rating but it will also remove any worry. Even if you can afford to make a small contribution on a monthly basis it’s better than not making any and it leading to further consequences such as bailiff’s attending your property or a CCJ. 

Getting Organised 

Something that many people fall down on is keeping organised. The only way that you’re going to keep a handle on your finances is if you’re organised. Otherwise, you risk leaving items off of your expenditure a not allocating the right household income to the right areas. Create a family folder that contains any important documents, including payslips, council tax paperwork, general bills, insurance paperwork, debt letters etc. Any new mail you receive would be placed in the folder. It can be very easy to let the folder get out of hand and for it to become unmanageable, so it’s a good idea to set some time to one side for sorting through it at least once every three months. Chuck out any old letter and only keep the most recent and the most relevant. You will get a level of satisfaction as you are slowly able to throw away letters of debts that have now gone because you’ve been allocating your money correctly. 

Savings 

Once you have started to manage your money and work to paying off your debts, you can look to starting some savings. Have a look at the amount of money you have left from your disposable income and have a think about what you’re saving for. Then you can start saving a certain amount each month. It’s a good idea to set up a saving account and save your funds at the start of each month instead of the end. People who save this way are much more successful as they’re less likely to dip into the funds that could be allocated to their savings potential.

You can also earn extra cash by doing paid surveys online, places like valued opinions, surveycool or pinecone research can sometimes pay upto £3 a survey!

This is just a short guide to helping you get on top of your finances to start getting debt-free and saving, Do you have any other tips that you can share in the comments?