Most of us try to manage our money. But, sometimes life just gets in the way and things go wrong. When that happens it is all too easy to go down the wrong path and end up deep in debt.
If it has been a while since you last looked at your finances, I suggest you set aside an hour or two to do so, as soon as possible. That will enable you to identify any issues and remedy them before they turn into bigger problems. Here is how I suggest you approach the task.
Identify and quantify what you are spending
First, use this budget calculator to quickly identify where your money is going. It is best to open your banking app when you do this so you can identify your costs accurately. The more accurate the data you put into the calculator is the easier it will be to see the true state of your finances.
Work out if you have a problem
That particular budget calculator asks you to enter your income in at the beginning. This is great because it enables you to instantly and accurately identify how much spare cash you have to play with.
Sometimes the results will be good and you will have more disposable income available than you thought. Other times, things might not look so good. A lot of people that go through this exercise discover that they are spending more than they earning. Without really realising they are doing so they are gradually relying more and more on credit to get them through life. When that starts to happen, serious debt is just around the corner. But, there is no need to panic. As you will see, there is plenty that you can do to quickly remedy the problem.
Work to reduce your outgoings
The easiest step is to review your outgoings and identify areas you can save money. It could be as simple as skipping one or two nights out, cancelling your gym membership and maybe buying slightly fewer clothes. Pretty much everyone will be able to find ways to live on less. This article contains 50 effective yet simple ways to do just that.
Changes, like cancelling your gym membership or switching to a cheaper mobile phone contract, will benefit your bank balance immediately. So, don’t hang around, take this step as soon as you can.
Try to earn more money
It is also worth considering taking on more work to fill the gap. You could work more hours at your current job, take a 2nd job or join the gig economy. There are lots of opportunities out there. Unfortunately, most of them are not that well paid, but, whatever you earn will make a difference. Plus, if you are busy working you can’t be out spending. So, that helps too.
Install and use a budgeting app
Lastly, install a good budgeting app on your phone and get into the habit of using it. That way the minute you start to go off track you will be told so that you can take remedial action.
[*This is a sponsored post - Photo by Emma Matthews via Unsplash]
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