Review monthly income and expenditure.

Money Saving Tips

2. Take time to review your total monthly income and expenditure. Sit down with your partner or family (if applicable) and discuss your total household income, weighed against the amount you are spending. Be fully honest, and several advantages will become apparent. For example, you may be able to identify regular savings opportunities, as, if your income far outweighs your monthly commitments, you could easily put a set sum into savings every month with confidence, as you have deemed this action clearly affordable.

This will aid you to make more of your money, particularly if you tend to spend whatever you have left at the end of the month in celebration of the arrival of your next salary. This reviewing procedure is key to your identifying problems as well. If your outgoings outweigh your income, or are even close, changes need to be made.

If you find yourself robbing Peter to pay Paul, taking money from a Mastercard to pay a Visa bill, or are paying regular bills such as Council Tax or shopping by credit card as you don’t have the funds elsewhere, then debt shall only continue to escalate at an increasingly alarming rate. Again, consolidation may be the best option, allowing you to decrease your outgoings, (often dramatically), and providing increased financial stability.

Whilst consolidation does have it’s disadvantages, such as: increasing the term of your borrowing and the total amount payable in many cases, your priority must be to make life easier now, rather than wait until it is too late. It may be that your situation may not be as critical as the aforementioned example, and slight adjustments to lifestyle may serve the same purpose. For example, set yourself a rule that if you can’t afford to eat out without using a credit card, then don’t, and so forth.

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Calculating Monthly Income and Expenditure