Keep your finances under control in 2018
So how is 2018 going for you do far? By this time of the year many of us have given up on our New Year Resolutions and are completely back to “business as usual”.
However, if one of those New Year Resolutions was to sort out your finances then it is well worth revisiting that. It is not too late to start your resolution again.
Getting on top of your finances may not be easy but it is essential if you want to be able to enjoy life without continually worrying about money. Financial difficulties are also one of those things that will only get worse if you do nothing about them. So if you are struggling with the aftermath of Christmas, you need to take action to stop things getting worse and to try and get your finances into shape.
Here are five ways that you can improve your finances in 2018. If you start doing as many of them now as you can, then you really could see your finances turn around this year.
1 – Face up to reality
Most of us can become just like ostriches when it comes to our finances. Our heads are firmly in the sand and we just won’t look up. This is completely understandable, as we are scared of what we may find. But it is much worse not to know where you stand because then you have no control over anything. You will keep sliding further into a financial mess but not really understanding what is going on.
So take a deep breath and make a list of everything to do with your money. What money do you have? What is in your bank account? Do you have any savings or investments? Is there money that you know is definitely coming to you, perhaps as a gift or someone repaying a loan? Then make a list of money that you owe, such as loans, overdrafts and credit cards.
You can then see how you are fixed, and can decide what to do next. If you do have a bit of money available you may decide to use it to pay off some of your debts such as credit cards and loans with high rates of interest. But if this is not the case then you need to look at other ways of paying off your debts and of making sure that you do not let them increase any further.
2 – What comes in and what goes out
The next thing is to make another list: this time of everything you earn and spend each month.
Firstly, what do you have coming in? Think of absolutely everything that regularly comes your way: your salary or wages, tips or bonuses, benefits, interest or dividends from savings or investments, any contributions from family. No matter how small the amount, make sure it is included to get an overall picture.
Now list all your regular payments. Include everything: mortgage/rent, household bills, loan/card repayments, subscriptions etc. If you do not already pay bills by direct debit it is a good idea to do this. It helps you to see exactly how much is going to be taken out of your bank account and when. You may also get some kind of discount for paying by direct debit. Then add to your list regular essential spending such as food and transport to work, and anything else that you regularly spend money on: clothes, cosmetics, entertainment, socialising etc.
3 – Make a budget and stick to it
From the two lists you made in Step 2, you should be able to see how healthy your monthly finances are. If it looks as if you have enough money coming in each month to cover all your expenses you now need to make sure that you don’t spend more than you have on your regular payments list. It is a really good idea to record everything you do spend in either a notebook or an app: budgets often look good in theory but you end up overspending in reality. So do your best to get to know where the money is really going!
4 – My lists don’t match!
Many of us find that we have more money going out than coming in. This is not a pleasant discovery but does help to explain why we are sliding further into debt each month. Now you can see it clearly in black and white, it’s time to change. There is no easy way round it: you need to find a way to either increase your income or reduce your expenditure: or both.
There are various ways you might try to increase your income. Think about changing jobs or taking on some extra work, renting out a room in your home, selling some of your unwanted goods either locally or online (eg eBay, Gumtree or Music Magpie). You may need to be even more drastic and consider major changes such as moving to a smaller home – or back in with family – or selling your car. A temporary sacrifice could make a huge difference to your life longer term and really help you to get back on your feet.
As well as increasing income you need to eliminate all non-essential spending. Go through your list and identify anything that you are spending money on that you could manage without. For the essential household bills do make sure that you are getting the best deals from all your suppliers and switch suppliers where necessary. Adapt your shopping habits to make sure you get the best prices possible rather than just go to your usual store. Work with family and friends to save money wherever possible so that you are all moving forward together.
Another temporary solution is to take out a loan to consolidate all your existing debts into one loan and one affordable monthly payment. Even if you have had credit problems before, you may be able to get a bad credit logbook loan to help with this. The idea of this is not to increase the overall amount of your debt, but to make the repayments easier to manage.
5 – Saving for a rainy day
Many people have no savings at all but this is another good things to start doing as soon as you are able. Having a little bit of savings can prevent you getting into debt ever again! It means that when special events or emergencies arise, you have some money to help instead of running up the credit card again.
So do try to put aside a little bit of money each month. Start small and build up from there. Ideally put your money into a separate bank account so that it is not too easy to dip into it. It really does not matter if you do not save much to start with; it will start getting you into good habits that could be part of a brighter financial future.
If there is any way that we can help you in the process of getting your finances under control then do contact us at Logbook Loans. You can get in touch with us online or by calling 0330 400 4137.