The New Year is a great time to take stock and review your finances. We look at ways to help you clear your debt in 2016.
Get rid of any non-essential expenses
Weekly trips to eat out or daily Netflix downloads can quickly eat into your wallet.
You could easily reduce your spending by working out what is essential and non-essential spending.
Going out fewer times each week and cooking at home will save you money in the long run.
TV and magazine subscriptions or mobile phone contracts can also be costly so you should work out what you actually use. If you barely watch certain channels, could you cut back the monthly fee, or if you hardly ever send texts, could you reduce your allowance and monthly bill?
Make a spending plan
You wouldn’t get into a car without knowing where you are going. So when setting a budget it is important to have a spending plan.
Work out how much you make from your salary each month and then look at your outgoings to see how much of your income is spent and how much is left over.
Keep track of when you’re spending
There are so many convenient ways to pay for goods and services these days, from cards to contactless. But this can make it hard to keep track of how much is actually coming out of your account.
You could make a note each time you spend some money or alternatively take a set amount of cash out at the beginning of each week or month and see if you can stick to just spending that.
Keeping to a budget doesn’t mean you should never spend money. Everyone is entitled to some fun.
It doesn’t have to be big or expensive, but a little reward for your hard work each week or month is a good motivation to keep on saving.
This could be in the form of a night out at the end of the month or something simple like an extra coffee.
Stop relying on credit cards and store cards
Credit cards and store cards can sound tempting, especially with incentives such as cashback or interest-free purchases.
But eventually you will need to money to repay and if you don’t have enough then the high rates of interest will quickly stack up.
If you are struggling you should avoid taking on more debt and concentrate on what you already owe.
One of the biggest causes of money problems is inertia. People forget they are paying for certain items they have set up on direct debit or don’t bother looking around for a better energy provider or bank account.
Keeping an eye on your direct debits and the amount you pay for energy or receive from your bank can reduce your bills and enhance your income.
The same is true of your weekly shop, could you find your food cheaper elsewhere?
The thought of more quiet nights in during 2016 and keeping an eye on your finances may sound dull.
But soon enough you will see more money left in your account after payday and less stress over credit card bills or unpaid overdrafts.
It could all be worth it next New Year’s Eve when you are toasting a frugal and financially successful 12 months.