Budgeting and organising your financial life might seem like a daunting task but once you’ve done it you’ll have much greater control over your money. Crucially, you’ll be able to find out if you’re spending more than you earn – a situation that can ultimately make debt unmanageable.
Knowing exactly where every pound is spent is a powerful way to stay financially stable, so start 2022 with a detailed budget and a better overview of your finances. With so many budgeting apps around you can make a budget on your smartphone, check your finances on the move, and adjust your spending accordingly.
So what should you do to be financially organised in 2022?
To make an accurate budget you’ll need:
Categorising your budget means you can see at a glance how much you’re spending each month on items such as food, your car, household costs, insurances, clothing, and entertainment.
The same applies for your income – this might include regular employment earnings after income tax and National Insurance have been deducted, freelance income, regular state benefit payments, or interest on savings or investments.
If you also highlight your essential outgoings - mortgage/rent payments, fuel, council tax, and other household bills – you’ll see the minimum amount you need each month to cover top priority bills.
It’s important to include birthdays, holidays, and Christmas spending in your budget, as well as the smaller expenditures you make on a regular basis, such as work lunches or magazine subscriptions.
It’ll provide a realistic picture of the money you spend, and help you avoid inadvertently living outside your means. Spending more than you bring in might not seem like a problem in the short term, but it can lead to a debt spiral that’s almost unnoticeable at first.
The additional interest and charges made by credit card companies can quickly make even the minimum repayments unaffordable. So when you’ve incorporated all spending and income, you need to balance your budget.
Once all the figures are included you’ll find out if you’re spending more money than is coming in. Alternatively, you might have residual income that you didn’t realise was available, and be able to use it to pay off more debt or save/invest.
Whatever the outcome, budgeting reveals the true picture of your finances. Crucially, you’ll see if you’re getting into too much debt and be able to take the necessary steps to avoid serious financial difficulty in the future.Â
If you need to cut your costs, switching providers can save you money. Online comparison sites are an easy way to check if you’re overpaying on energy, for example, or broadband. In fact, switching can help you make significant savings over the course of a year.
For more help with budgeting and organising your finances, get in touch with our expert team at Scotland Debt Solutions to arrange a free, same-day meeting. We can offer professional advice and support on managing your money and dealing with debt.
Our Scottish based team can help advise you on your debt problems.
Our personalised debt report will help you better understand your financial position and see where your money is going.
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Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debts
A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt will be wiped out.
A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.
Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRC