How to budget and take control of your debts in 2018

December 20, 2017

The New Year is a time for fresh starts and positive thoughts for the year ahead. New Years’ resolutions often focus on improving personal health, such as losing weight, taking up a new sport, or giving up smoking. However, the New Year is also a great time to take stock of your finances and put a plan in place to help you enjoy a financially healthy 2018.

The only way for you to really take control of your finances is to know exactly where you stand. The best way of doing this is to create a budget detailing all of your monthly incomings and outgoings. During this process you need to be completely honest with yourself; ensure you put the figures down as they actually are rather than how you would like them to be in an ideal world.

If your budget shows that there is money left over at the end of the month, then you are in a good position. This, however, does not mean that improvements cannot be made; there are always savings to be made and ways you can trim your outgoings.

If your budget shows that you are spending more than you are bringing in, you need to take immediate action. Continuing to live in an income deficit will see your debt problems get worse as each month passes. Your first step is to ensure you pay all your priority bills before anything else. Priority bills include your rent or mortgage, council tax, gas and electricity, and your TV license. These are classed as priority bills as not paying them can have severe consequences; you could receive a court summons, have your gas or electricity supply turned off, or even lose the roof over your head. Your next task is then to revisit your budget and see where savings can be made. The below tips could help:

  • Trim your grocery budget – Could you reduce the amount you are spending on food? Cutting out takeaways and convenience food and switching to more economical home-cooked meals could shave a significant amount off your monthly food bill, as well as helping your waistline.
  • Scrutinise your direct debits – Cancel any unnecessary monthly commitments such as subscriptions for magazines you no longer read or your gym membership as long as you are out of contract.
  • Consider how efficient you are with your energy usage – Small changes such as switching off lights when you leave the room, keeping an eye on how much water you are using, and turning the thermostat down a degree can lead to hefty savings over the course of a year.

If you have already reduced your outgoings to the bare minimum, then you need to look at increasing the amount of money you have coming in. This could involve taking on a second job, selling your unwanted items, or signing up for online survey sites.

The most effective budgets are those which are revisited and updated on a regular basis to reflect your current situation, so rather than seeing creating a budget as a one-off event, get into the habit of keeping your budget up to date. This will ensure you maintain a close eye over your financial situation and make sure you stay on the right track all the way through the year.

If you live anywhere in Northern Ireland and require advice about how to handle your debt problems, then Northern Ireland Debt Solutions can help. Contact us directly to arrange a free no-obligation consultation.

Lawrence O'Hara

Insolvency Adviser

Tel: 028 2132 6269

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