Wages not rising, living costs increasing, all mean that your monthly pay packet is unlikely to stretch as far you need it to. You may have the positive attitude to make your finances work yet sadly; your bank balance is not showing any signs of growth.

Like most people, you are probably struggling to make any reasonable headway, and saving too much can seriously make you unhappy – changing your lifestyle too drastically is unrealistic.

#1 Budget sensibly

Figuring out how much you have to spend and critically, how much you do not, is vital if you are to budget successfully. You do not have to sift through your bank statements and write your in’s and outs on a piece of paper.

Today, several budget calculators can aid you in checking where your money is going. Money Dashboard is a great app you can use where you can see your finances in one place, yet you can also use a budget calculator from your bank or even the National Debtline Calculator. All are great to get started. If you are serious about saving and tech-minded, there are now a plethora of savings apps you can consider.

#2 Time to streamline your bills

Paying your rent or mortgage is essential. Paying for food is necessary. Having an Instagram-inspired holiday for the whole family – not essential.

Dividing your expenses into what is essential and what is not, is the harshest decision-making you will do. Yes, you need to make savings, but you must be realistic – changing your lifestyle too much will only make it inevitable you will return to your spendthrift ways.

First, if you have a mortgage, consider switching to a fixed rate deal so that any increases in interest rates will not impact you. Use a price comparison website to shift your energy bills to a cheaper supplier when they are due for renewal.

After reducing the cost of your essential bills, check that you are receiving all your state benefits – are you claiming for what you are entitled to? You may be surprised!

#3 Be honest with yourself

Totalling your non-essential expenditure will soon make you realise that you have been probably spending more than your earning potential.

Do you need several holidays a year? Must you always buy coffee from coffee shops? Do you need those sports channels for your TV package at home? You need to be utterly ruthless in cutting these luxuries out as they soon mount up.

Don’t change your life too much – or you will not keep to your streamlined budget. If you must have all the TV and internet packages, go out for dinner, take several holidays a year – ask yourself if I wish to remain with this lifestyle, can I make savings on doing the things I love? The answer is always yes!

#4 Cut down or at least manage your debt better

This may sound obvious, however often, people forget to examine their debt and only focus on making savings. Reducing debt is a better way to not only limit your expenditure but increase your wealth simultaneously. Loans and overdraft repayments contain not the money you borrowed but the interest accrued on them. Overdrafts themselves, are particularly expensive today as a means to borrow money.

Credit cards are a part of life and can be your most expensive debts to clear – however that does not mean you cannot find a 0% balance transfer deal, helping you to pay off your payments faster. Try not to stick to the minimum amount, as this will prolong your debt so make regular payments when you can when the interest is at 0%.

Alternatively, why not get a cashback credit card? If you must spend every month on credit cards, then with a cash back credit card you will obtain a percentage back in the form of credits to your credit card statement.

#5 Seek support should things are worse than imagined

If these steps seem out of your grasp, or your debt is more severe than you initially thought, then you may wish to seek some advice. Don’t compound the problem by ignoring it and returning to your current lifestyle. Charities including Step Change can help you create a debt management plan ensuring you meet your essential expenses like your mortgage or your rent.

Should you need further support, then speak to the Citizens Advice Bureau for more hands-on practical help. Neither of these organisations can pay your debt for you – but they are experts in helping you manage your debt and lifestyle more effectively.
Don’t forget to pat yourself on the back every time you shake up your personal finances. It does not have to be a massive shift in your focus, but these 5 small, more manageable bite-size steps can make it easier to transition to your new prudent lifestyle.

Bio

David Bailey-Lauring is a small business owner and dad of three, from Brighton, UK; he writes about tech, finance and entrepreneurship.

Before making financial decisions always do research or talk to a financial adviser. Views are those of our author and do not constitute financial advice.

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Hi Im Eddie. Ive been working in finance for most of my life so I thought I would start to show some or my learnings. Hope you find it useful. I have dogs too and cats. When Im not feed them Im running.

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