Too much month at the end of the money? Many people face the problem of running out of money before their next payday. This is usually because they don’t take the time to organize their expenses and end up wondering what happened to their money. There are solutions you can use to control your finances that have helped me over the years. Now I want to share them with you so that you can learn to control your finances easily.
Make a list of your monthly bills
Monthly bills consist of things like rent, electricity, water, community tax, and gas. These are bills that usually have the same amount every month. Make a list of all the bills you pay each month, along with the amount you pay for each one. Now add up the numbers so you know how much you are paying each month in total. If an invoice is between two amounts, note the higher amount. For example, if you pay between 50 and 70 euros for electricity, write down 70 euros. You can find the amounts by reading your bills or bank statements.
Some electricity and gas companies offer you the option of making a single monthly payment. This way you can monitor how much gas or electricity you use and adjust your monthly payment accordingly. It’s good to choose this option so that you only have to add the extra money if it increases or decreases the direct debit. Businesses don’t mind you going into debt with your gas in the winter, as your payments reduce the debt in the summer months when you don’t use your heating.
SET UP DIRECT DEBT
With direct debits, companies can withdraw money directly from their accounts when the invoice is due. Once you know how much you have to pay for bills each month, you can leave that amount in your account or transfer the full amount to another account if you want to use a separate one for bills. Companies will notify you of any increases so that you can adjust the amount you paid. If possible, choose the same day for payment if you are paid monthly or the next day. This is useful if all of your expenses are from the same account.
Note: These companies can only take out what has been authorized, so you don’t have to worry about additional money being paid out. There are also times when payments can arrive 2-3 days earlier because the debit date falls on a weekend or a holiday. So make sure your money is in your account in advance. Call the companies you paid to set up direct debits. The direct debit method can actually save you money when you get discounts.
MULTIPLE BANK ACCOUNTS
Your bank allows you to open multiple checking accounts or checking accounts that you can use for different purposes such as expenses and bills. Use one of your accounts for your monthly bills and set up your direct debits to be debited from that account. Transfer the total amount you need to pay bills to this account once a month, and you know the bills are sorted by month. I would recommend adding extra money to the total so you don’t have to worry about being oversubscribed. It can also be a good idea to have a small overdraft on the account if you need it.
You can also use an account for your general expenses like food and fuel. I recommend that you transfer your salary to this account. After transferring the invoice money, all you have to do is spend everything. You can also use this account as a savings account by leaving your money there and only spending what you need. Anything left over from payday can be classified as savings.
If you prefer, you can have a separate savings account to which you can transfer a fixed monthly amount or have it automatically settled via a standing order. Or you can manually transfer whatever is left over from the past month. It is always recommended to save some money if you need it. You never know when there will be an emergency or situation where you need extra money. You can choose an amount that you can easily save and consider it as a monthly invoice.
SET SPENDING BUDGETS
Sometimes we can be too ruthless with money. Imagine going to the store with the kids in tow and putting things in the basket. Imagine seeing something on offer and reaching for as many as possible or picking up something you didn’t really need, but it was a bargain. After you have set aside money for the bills, we recommend that you set an spending budget. For example, you may only have £ 400 a month left, so you can limit yourself to £ 100 a week. Make sure you have the things you really need before you start spending, and use the rest for goodies.
You can save money by focusing on the week’s main purchases and buying certain things in bulk. Buying a six-pack of baked beans may be cheaper than buying six separate cans. If you like to drink, buy a few cans to drink at home and cut down your time in pubs and bars. If you use public transportation, buy a passport to save money on paying tariffs separately. Try to bring a packed lunch to work. Basically, if you don’t really need it, don’t buy it.
The longer you have a credit card or loan debt, the more interest you pay. If you have debts, there are ways to keep them under control and save money.
- If you have more than one credit card, consider making a transfer. If you transfer all of your credit card balances to a credit card, you’ll get a lower interest rate and a lower monthly payment, making it easier and faster to withdraw.
- Use all savings to pay off the debt. This saves you money on interest payments and reduces debt faster. If you have extra money, first try to get rid of the smaller debts to get rid of them so that you have extra money for the larger debts.
- Consider a bank consolidation loan. You can borrow enough to pay off all of your other debts and only pay a fixed monthly direct debit payment. If you reduce the number of debt payments to one loan payment, you will receive additional money every month.
- If you can’t get a loan, consider an Individual Voluntary Agreement (IVA). This will freeze interest on all of your unsecured debt, and you’ll pay a fixed monthly amount as much as you can afford for five years. This does not apply to secured loans like car finance.
I hope this article somehow benefits you. I personally have lost a lot of money through debt and reckless spending over the years and have finally put myself in order. I have no debts and no money in the bank. And I hope you get to that point too.