Are you guilty of buying things you don’t need or do you find yourself resorting to a credit card at the end of the month? If you’re overspending, it can be difficult to keep control of your finances. If you’ve slipped into the red, it’s advisable to try and take action as quickly as possible. We all have months that are a little more expensive than others, but if you’re consistently reaching for your card or going over your overdraft limit, it’s time to make some changes. Here are some simple steps you can take to get back into the black.

[Photo courtesy of Steven Depolo/flickr.com]

Living by a budget

It may not seem like the most thrilling use of your time, but making a budget is so important. It’s virtually impossible to keep track of what you spend when you’re shopping online, making contactless payments or taking cash out of an ATM. If you’re not aware of how much you’re spending, your estimate of your account balance may be way off. If you’re familiar with the scenario of checking your balance and being greeted with numbers that are way below what you thought, now is the time to start living according to a budget.

Budgeting is very simple, and it can really make a difference to your financial situation. The aim is to work out how much you can afford to spend or save based on what you’ve got coming in and what is going out of your account. If you’re not familiar with these figures, there’s every chance that you’ll overspend.

When you’re budgeting, there are various methods you can employ. You can go rustic and get a pen and a notepad and jot down the numbers, you can use an app, or you can draw up a spreadsheet. Some people prefer the old-fashioned techniques, but it is often useful to have a computerized version, as this will enable you to adjust and adapt your budget as you go. Start by writing down all the payments you expect to come into your account, for example, your salary and any tax credits or benefits you receive. In another column, write down all the payments you expect to go out, for example, bills and insurance payments. Then note down any other expenses you incur on a regular basis, for example, gas and groceries. Finally, add one-off expenses that will affect your balance that month, such as a vacation deposit or your partner’s birthday gifts. Once you’ve got all the numbers in front of you, this will enable you to determine how much money you’ve got left. If you have a figure in mind, this will reduce the risk of overspending.

[Photo courtesy of U.S. Air Force photo/ Airman 1st Class Taylor Crul]

Reducing household costs

Do you struggle to afford your electricity bill or are you spending too much on your cell phone? If your household costs are too high, there may be ways of bringing them down. One of the best ways to do this is to compare prices charged by different providers. Take your energy bills as an example. You may find that if you switch electricity provider, you could save a lot of money. Many of us tend to stick with the same companies for years because it’s easier, but actually, if you take the time to do some research, you may find much better deals. Energy providers often save the best discounts and incentives for new customers, so if your loyalty isn’t rewarded, don’t hesitate to check prices online and consider switching. Apply the same logic to any other regular payments you make, such as car and health insurance and your TV and broadband package.

If energy bills are your main concern, it’s also worth considering how you could reduce usage. Are you spending a fortune on heating, for example? If so, look for ways you can make your home warmer without relying on radiators 24-hours a day. Plug gaps in the window frames, add brushes to the bottom of the door and use draught excluders to keep the heat in. It’s also advisable to replace traditional bulbs with energy-efficient light bulbs and to use a smart meter to enable you to see how much energy you’re using and how much you’re spending.

[Photo courtesy of  Michael Smith/flickr.com]

Cutting down on non-essentials

We all like to treat ourselves, but it’s essential to learn to live within your means. If you’ve got a credit card and you’re tempted to use it for non-essentials, try and be more disciplined. We need food and a warm home, but if you’re struggling to pay the bills, it’s not a good idea to make your financial situation worse by buying clothes or taking your card on a night out with you. Ask yourself if you need to make every purchase. Avoid impulse buys and eliminate temptations. If you find it hard to resist, switch up your social activities. Instead of going to a restaurant or taking a trip to the mall, organize a movie night or supper club at home or do a clothes swap with your girlfriends. If you really can’t control your urges, ask somebody you trust to look after your card for you or consider cutting it up. This may seem drastic, but you’ll soon get used to a new, more frugal way of life and you won’t regret taking steps to avoid adding to existing debts.

[Photo courtesy of Porapak Apichodilok/pexels.com]

Do you spend too much every month? Are you paying out more than you’re earning? Many of us go through periods when it’s difficult to balance the books, but if you’re consistently going over budget, you could end up in a difficult situation. Now is the time to start taking steps towards a more positive, stable financial future. Start by drawing up and sticking to a budget and taking more control over what you spend. Think carefully about what you actually need versus what you want. If you’re struggling to afford bills, there are ways to drive down costs. Compare prices online, try and negotiate better deals and resist the temptation to automatically renew contracts and policies. Even the simplest changes can make a big difference.