I wonder how many of us actually manage our money, taking control over all aspects of our financial lives. There will be some people who know in detail what assets they have, what their liabilities are, how much they have coming in and how much going out every month. They may always check all of their monthly statements for accuracy. There are others who don't have a clue about their budget, maybe paying little or no attention to their bank and credit card statements, and lose track of where they have savings and whether they get the best deals. And then there are the majority in between who are somewhere in the middle.

You may already be dissatisfied with how well your money works for you in which case, we trust that we can give you some budgeting pointers that may work for you. If you are more comfortable financially, then perhaps there may be something here for you too, but in any event, do take a look at the useful links at the end of this article which we are certain will be valuable.

This article is not intended to be financial advice. For anybody who is in financial difficulty and can not manage their situation we recommend that you take independent professional financial advice. Please see the end of this article for some useful links.

So where can you start managing your money?

General

• Ensure that you keep any financial statements and have a good filing system so that you can get to any piece of information at any time. For example, separate your bank, credit card, telephone, utility statements and so on, and keep them in date order.
• After you receive any statements, keep them in a place where you can see them until you have checked them for accuracy. Any company can make a mistake, genuine or not.
• If anything is incorrect, follow it up with the company straight away and keep notes on who you have spoken to, when, and what the agreed follow up would be.
• Keep up to date with good deals. Bookmark any links that you find below which you will find useful.

Income

• What are your sources of income?
• How often are you paid from each one and how much?
• Check your bank statements for irregular credits that you may have forgotten about such as dividend payments or savings interest that is being credited to your current account.
• Is there anything else?

Spending

If you are having difficulty making ends meet or you already have debt, it is very important for you to know what you are spending your money on

What credit cards do you have? Take a look at your previous statements over the last six months or year, or any other time frame that is important to you. For each transaction, write down what type of spending it is and decide on the following:

• Was it essential expenditure? Was it a treat?
• Did you buy something out of habit?
• Was it impulsive?
• How much did you need it?
• What would have happened had you not bought it
• Check your bank statements for any cheques you have written, debit card payments you have made and look at your standing orders and direct debits. For each one, ask yourself the same questions as above
• Have you taken out any bank loans or other credit? Ask yourself the same questions as above
• Check your bank statements to find out how much cash you have taken out of your account each week or month? This one may be more tricky to itemise. If you haven’t already started to keep a log of what you are spending your cash on, start now so that you can begin to build up a picture of how you are spending. If you keep your supermarket and other shop or restaurant or bar receipts, what have you been buying? If you haven’t kept them, start, so that you can keep an audit of what you have been buying.

Auditing your spending

If you know how, enter your income and spending onto a spreadsheet. For each item of spending you could put a code alongside it to tell you whether it was essential or optional, desirable or luxurious. You might use a code for food items, another for restaurants and bars. By using a coding system you can quickly see how much you have spent on a particular category over a week, month or year. By doing this you can see how much you spend on your social life, perhaps bars, restaurants and clubs. How much do you spend on convenience packaged food at the supermarket? On sporting events, make up and toiletries and so on. Travel and holidays? These are just ideas and examples. It is up to you how you want to categorise your spending and up to you what you consider to be essential in your life.

How big is the gap?

Between your income and expenditure? If you have surplus income. What will you do with it to make it work best for you and your circumstances? There are many options for savings and investments. Cash savings, shares and other equity investments or property for example. Your own research or a discussion with a financial advisor may reveal your best options as they will depend on a host of factors such as your job, income, security, age, family context and so on.

If your spending outweighs your income and you have not been able to work out how to close the gap sufficiently, you may need to take professional financial advice. We can not advise you here, but it can be possible to reduce your regular outgoings dramatically either with some homework or by talking to an advisor. Here are some ideas that other people have worked with:

• Having audited your spending, what type of spending can you reduce or eliminate?
• For “essential” expenditure, what other cheaper brands might you consider or could you shop elsewhere? Could you buy fewer items than you have before? Can you mix your product with something else to bring down the overall cost but still enjoy some of what you had before?
• Have you looked at changing suppliers of your utilities? There are many companies in several markets where shopping around can be very cost effective. For example, in the supply of domestic fuel, telephone services, mobile phone contracts
• Can you consolidate your loans? Credit card debt is very expensive. Is it worth talking to your bank to take out a single loan at a lower interest rate to pay off your credit cards?
• How about your mortgage? Have you checked out the current deals to see if you can reduce your payments without increasing your debt?
• Perhaps you could take a lodger either short or long term to help you pay some of your debts
• If you rent, could you pay less rent by moving to another area or finding alternative accommodation?
• Are you entitled to claim any benefits or grants
• Could you do better on your savings rates? Check out the links below
• When did you last have a pay rise? Do you deserve more? What stops you from asking?
• What about changing jobs? Would you be more satisfied and get paid more if you moved on from where you are now?
• How about an additional part time job that would help you to close the financial gap quicker?
• Do you have children at home? Could they do more to help out with the household expenses?

Useful links

If you know of any other useful websites or publications please let us know and we will print useful information in Life Issues whenever possible.

http://www.fsa.gov.uk/CONSUMER/11_LEARN/index.html
Part of the website of the Financial Services Authority (FSA) which tells you about money and savings

http://www.fsa.gov.uk/consumer/pdfs/financial_advice.pdf
More from the FSA guiding you through what financial advice is and how to get it. Some useful links too

www.moneysavingexpert.com
Excellent website with lots of moneysaving tips from savings and mortgages to online shopping, best credit card deals, travel, utilities and phone deals

http://www.adviceguide.org.uk/
Citizens Advice Bureau: lots of information about employment, tax, benefits and debt management

http://www.direct.gov.uk/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/fs/en
Government pages telling you all about benefits, tax credits etc.

http://www.bbc.co.uk/consumer/your_money/
The BBC's pages about your money


www.uswitch.com
Find out which company will give you the best deal on domestic fuel supplies

www.mysupermarket.co.uk
For those of you who supermarket shop online, this site compares the cost of your shopping trolley at Asda, Sainsbury, Tesco and Occado. You can then choose which one to buy from

www.saynoto0870.co.uk
A telephone directory of alternative numbers to premium rate telephone numbers like 0870