If you’re in need a little help in preparing yourself for sudden expenses and help saving, you’re not alone. Managing your money, in theory, should be simple and easy. Never spend more than you earn, keep clear accounts and budget accordingly. In reality though, it’s not as straightforward as that. We all know the drill. Unexpected emergencies and expected, but forgotten, birthdays demand a sudden dipping into the funds. A restaurant bill catches you off guard or a drink too many leads to an expensive, unavoidable night out. To avoid that agonising wait until payday, we’ve compiled 5 IDEAL ways to avoid overspending. Here they are.
Figure out your income
‘Figure out’ may seem a silly term when everyone knows their basic income, but we mean the one which you can actually spend, after tax and such. You’d be surprised at how many budget from the strong position of their pre-tax, pre-rent salary. Use the salary calculator if you need some help make a rationalised, realistic calculation.
Review current, ongoing expenses
Make a list of all your regular bills and expenses such as rent or mortgage, utility bills, car and insurance. Alternatively, use internet banking to track them. It’s a useful, simple step which keeps all outgoings in one, easily accessible place. Add them up and work out what your monthly average is and then compare it to your salary. By subtracting this number from your income you will know exactly how much money you have to spend on everything else.
A sensible use of extra income
So, you’ve got some extra money following a frivolity-free month? The urge to splurge is almost too much to bear, but please, resist. Consider putting it into a savings account or an ISA (do your research before diving in). It will generate interest over time and should an emergency occur at least you’ll have a fallback into which to dip, unallocated to any other expense. Try not to think of this extra money as disposable income.
Identify patterns of when and why money runs low
It’s safe to say there are certain times in the month (ie. payday) which encourage a spending spree. There are also times when quids found down the back of the sofa need to be rationed for days. Patterns emerge and, as such, prevention rather than cure can be practiced.
Avoid impulse buying
That feeling of ‘I must have’ is just an illusion caused by target marketing and the guilt-fest of social media. Resist. Be yourself. You look great with or without the latest on-trend item. And if you must shop, try and get into a habit of shopping during the sale periods and shy away from impulse buying.
All of that said, we all struggle from financial ups and downs from time to time. Budget by all means but at the same time focus on enjoying life. The occasional splurge is nothing to be afraid of.