Three Easy Budgeting Tips for People in Debt
People in debt sometimes struggle to determine how they actually overspent in the first place. Often, we simply lose control of our spending and allow ourselves to live beyond our means.
You may choose take out an IVA or debt management plan to deal with problem debts, but even if you seek professional help, you still need to budget so that you can meet the cost of your outgoings. Using these three easy tips, you can identify ways to claw back some of your disposable income within just one week.
1. Write It Down
For one week, write down everything you spend on a pad, or keep a note on your smartphone. If you have more time, you could use a spreadsheet to track everything you spend.
Keeping track of the money you spend has two outcomes: it helps you to be more conscious of what you spend, and it also helps you to identify where your money is going. Some people are shocked by the amount of money they spend on unnecessary items each day.
2. Cut It Out
Once you have a detailed list of your spending over a week, you can identify things that could be cut back or eliminated. This can help you to rein in your weekly spend and get your outgoings under control.
For some people, their morning coffee is the first thing to go. Grabbing a coffee at work, rather than picking up a latte on the way, could save you around £50 a month. Other people stop buying magazines, or bring in a packed lunch rather than buying sandwiches.
The idea is to cut out things you won’t truly miss. This will give your financial situation a boost and will leave you with far more money to tackle your debts.
3. Don’t Carry Too Many Cards
Many of us feel more tempted to spend when we’re carrying credit cards. Those unnecessary impulse purchases are so much more attractive when you have money in your pocket - even if that money isn’t technically yours.
Get into the habit of only carrying one card. Ideally, it should be a debit card and should not provide access to any money that has been ring fenced for paying off debts. This will help you to control your spending and ensure you only come back home with the items you actually wanted to buy.
More Debt Help
If you’re still struggling with money, click here to take the Varden Nuttall IVA test. You might discover that an IVA is the perfect solution.