You have decided to take control of your financial future. That's great. This page will help you build good habits.
Where to start
First things first, you need to work out exactly where you are starting from. Make a list of all your income, bills, assets (things you own) and debts (people you owe money to). By getting a snapshot of your current financial situation you will know what you are working with.
Seeing everything written down can help you to see what is essential and where changes can be made. The FREE budget planner from the Government backed Money Helper website is a great tool for doing this. There are lots of free budget planners online or available in an app that you can use for this or even just use paper and pen. Check your list against your bank statements as you may find things you had forgotten about. We have included some templates below that you could use.
Analyse your current spending
By analysing all of your spending it can help you to cut out the things you don't need or find areas where you can cut back.
It can help to sort your spending into groups. For example, you might label things you buy as essentials and others as nice to have, or you can get more detailed and add categories such as entertainment, food costs, travel and transportation. After you have put your spending into groups, total each category to see where the bulk of your money goes. You might be surprised at how much you spend eating out for example.
If you have time, review some of your bills by using comparison sites to see if you are paying too much. The first time you do this it might take some time as there is often a lot to compare so take your time and do one thing at a time. Its always a good idea to review each policy at renewal but if you haven't done it for a while look at everything.
Make a plan
Once you have worked out where your money goes it is time to make a plan. The plan needs to be realistic. If you cut out things you really love you are less likely to stick to it so cutting down rather than cutting out might be a better option or find a cheaper alternative. Once you pick a plan, give it a try for at least a month. You need that long to see if it works for you. Anything less, and you won’t see the benefit of keeping an eye on your finances.
If your plan is to save money, move it into a savings account as soon as you are paid so you are not tempted to or accidently spend it. Saving into a Wherry Dragon Credit Union account via our payroll deduction service can make this easy as the money goes into your savings account before you are paid. In the first few months you may need to keep an eye on your account to make sure you have enough and if not move it back and adjust your goals.
Once you find a system that works, keep going. Your focus will pay off! Of course, life can throw you off track sometimes, but that’s OK. As long as you get back on budget, a hiccup here or there won’t destroy your future financial success.
