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How to control your spending

Small costs add up over time, so it’s important you take control of where your money goes each month. 

If you haven’t already done so, look at our article on how to track your spending. This’ll help you identify exactly what you spend your money on. 

Prioritise your spending   

Be honest about the things you need to spend your money on versus the things you want to spend your money on. Paying your rent or mortgage and utility bills keeps a roof over your head and keeps you warm in the winter. Buying a daily coffee might not be as essential. Prioritising your spending can allow you to set money aside for the things that are important to you.

Review your regular bills  

Review any regular bills like your mortgage, energy, phones, broadband, insurance etc. You can often save by switching provider or negotiating a different contract with your current provider. Don’t be afraid to ask for a better deal, the worst they can do is say no. Arrange for all your bills to be paid a couple of days after your salary comes into your account – that way your balance will more accurately reflect what you can actually spend.

TIP: As well as your main bank account, open another one for bills and one for your savings. This will help you ensure priority bills get paid.

Find out what your extras really cost    

When you buy your daily coffee or cake, work out how much it costs you per week, month and year. You may be surprised how this adds up and how much you could save by not having them as often. Use Money Saving Expert’s Demotivator to find out how much those extras cost.

Set up different bank accounts for different purposes

As well as your main bank account, open one to pay your bills and open a savings account for things like holidays and big spend items.

Set up fixed direct debits for your essential bills

  • Mortgage or rent
  • Utility bills like gas and electricity
  • Council tax
  • Student loans

Now set up a standing order from your main current account to move the correct amount of cash each month. You should know how much this is as you have setup a fixed amount for each bill.

The advantage of doing this is that when you look at your main account, it shows how much you have available to spend, as you've moved all the money for your bills and other key areas to your bills account. And if you’re are tempted by an expensive holiday, you can easily see whether there’s enough in your savings account to cover it. This way you’ll be less likely to spend what you can't afford.

The potential disadvantage is that having multiple bank accounts can require more management and in some cases may affect your credit score.

TIP: You can often save on bills by switching provider or negotiating a different contract with your current provider.