Most of us think we have a handle on our spending, but it's only when we track it, that we understand where, and on what, we're spending our money.
Decide the period over which you are going to record your spending: a month, three months or longer. We recommend three months to start.
Using categories, for example, food, travel, entertainment, will help you see when you spend your money, and what you spend it on. Is the balance right, enough on enjoying yourself and enough to pay an unexpected bill?
- Get a notepad, keep it in the same place, and jot down everything you’ve spent at the end of each day, or you could use your Smartphone notepad
- Ask for, and keep your receipts to help ensure you forget nothing
- Speak to your bank, and get access to online banking, or an app, both these will help you see what you’ve spent directly from your bank account.
- Speak to your credit card provider and get access to your online credit card statement to see exactly what payments you’ve made.
Having worked out how much you spend, you can use the free online budget planner from the Money Advice Service. This lets you enter the details of your income and spending against different categories so that you can plan ahead.
TIP: Setup direct debits to pay your regular bills a few days after your income comes in. This means your regular bills will be paid first and your balance will reflect the money you have left to spend.
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