How to manage money day to day

When it comes to managing your money, there are lots of techniques you can use to stay on top, but most of it boils down to budgeting. If you’re new to budgeting, then here are 3 simple steps to follow to get more from your money.

Step 1

Work out your outgoings

Budgeting is one way to make managing your money simpler to do, and the first step is to understand what your monthly outgoings are.

It’s worth pointing out that for things like gas and electricity, your past months' bills won’t always help when trying to understand what your future bills might be. That’s because things like time of year, or price hikes can change how much they charge from month to month.

Don’t forget to factor in annual costs, such as insurance, memberships, subscriptions, or TV licence renewal.

Step 2

Needs or wants?

If you’ve never budgeted before, it can be a bit of a shock to see where your money goes – and how much goes where. But this can be a good thing, as it might encourage you to make some cut backs.

Your spending should split into two categories: needs and wants.
 

The key to a good budget is balancing both but making sure you’re prioritising the needs first. Anything left over once all your essentials are covered can then be used for the things that make life fun.

Step 3

Managing bills

A good way to prioritise essentials is by budgeting for your monthly household bills. 

To help with this, why not set up a separate bills account? Then, as soon as you get paid, put the amount you need to cover your bills into this account.

All your monthly Direct Debits will then go out from your bills account without affecting your regular spending account.

You’ll still need to check your bills account regularly, as some bills such as gas and electricity can vary month to month.

Step 4

Managing bills

You might find that once you’ve started budgeting, there’s a bit of spare cash left over each month. If so, it’s worth saving it for a rainy day or to help cover emergencies.

For things like this, you’ll want to look into instant access accounts, like Savings Pots. These are useful, as they’ll pay you interest on all the money you save, but it’s still quick and easy to take your money out if you need it.

When combined with features like, Save the Pennies, you could find that you quickly build up a nice little savings buffer. 

And that’s managing your money – it’s one of those things that sounds easier than it is, so don’t be disheartened if it takes some getting used to. If you stick at it for a while it’ll become second nature. And before you know it, you’ll could be so good at managing your money that you’ll be giving your own advice out!

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