How to take control of your money

Managing your money well doesn’t mean giving up the things you enjoy.

Instead, it’s about being prepared.

So whether you’re saving for something special, trying to stretch your income a bit further, or get ready for the unexpected, having a plan can make a huge difference.

By keeping on top of how much money you have coming in and where it’s going, you’ll feel more in control day to day and a greater sense of freedom.

But many aren’t keeping a close eye on their income and spending - and that’s causing unnecessary and avoidable worry.

1 in 10 people aren’t sure what they earn

According to research by IE Hub:

• nearly one in ten (9%) of us don’t know how much money goes into our bank account each month
• the same proportion (9%) of people have never tried budgeting

With that in mind, it’s no surprise to learn that one in six (15%) people don’t feel confident about how much they have left after paying essential bills.

1 in 5 don’t have emergency savings

Life doesn’t always go to plan. 

A household appliance could break and need fixing or replacing, you might have car trouble, or you could even lose your job.

So it’s well worth having an emergency fund in place, so you have a pot of money to access if the unexpected happens, instead of relying on credit cards or loans.

However, the IE Hub survey shows that one in five people (20%) don’t have any money set aside for emergencies at all.

And worryingly, there’s a gender gap too.

Men with emergency savings funds have £8,771 put away on average.

That compares with around £7,463 for women.

5 ways to get on top of your finances

1.    Keep track of what’s coming in and going out

Work out exactly how much money you’ve got coming in each month.

This should include everything from wages and benefits to earnings from side hustles.

Then track your outgoings, such as rent, bills, food, transport and subscriptions.

You’ll then have a clear view of how much you have left over for treats, luxuries and non-essentials, and work out where you can cut costs and save money.

Get started by checking out our guide to how to create a budget, so you can see how much money you have coming in each month and where it goes.

And give our budget planner a try - it’s free and easy to use.

2.    Work out what you want to achieve

Whether you’re putting money into a rainy-day fund or saving for something special like a dream holiday, there’s nothing more motivating than having a clear goal in mind.

It’s easier to stay focused and on course if you know exactly what you’re working towards.

3. Be realistic

Taking charge of your finances can feel daunting, so you may feel you have a mountain to climb.

But you can take some of that pressure away by breaking everything down into smaller chunks.

For example, instead of saying you want to save £1,000 a year, say that you’ll save £20 a week instead.

That can make it feel less intimidating and more achievable.

4.    Make saving automatic 

If you wait until the end of the month to save “whatever’s left,” chances are it won’t happen. 

So set up a standing order or direct debit to move money into your savings account as soon as you get paid.

It means you don’t have to think about it and any temptation to spend it is taken away.

5.    Review your budget regularly

Your circumstances will change over time, so don’t think of your household budget as something that’s set in stone.

If your situation improves or get worse, it needs to change accordingly, so it still works for you.

Make a point of reviewing your income, spending and savings regularly, so you can spot problems early and stay in control.

Even small tweaks could make a big difference over time.