3 ways to get back in control of your finances

24 July 2009

If you`re experiencing debt problems, one of the worst feelings is the lack of control. You might feel like all your money is spoken for as soon as you receive it, and any unexpected cost could cause you real problems.

With that in mind, here are some tips for taking charge of your finances.

If you have trouble keeping track of your finances, and find that this is preventing you from staying on top of your debts, a simple budget could be the answer.

To create your budget, take a look at your spending in previous months, and then draw up a list of any essential monthly costs: mortgage/rent, utility bills, debt repayments, food bills, etc. Take this total away from your monthly income, and what`s left is yours to spend or save as you wish. If you`re in debt, it`s wise to use at least some of this to `overpay` your debts.

In some cases, you may be able to relieve some of the pressure on your finances simply by cutting back on things you don`t need. There are some things we all have to pay for - food, housing and energy, for example - but things like eating out, new clothes (apart from essentials) and satellite TV subscriptions are simply not that important if you are struggling with debt.

Add up how much your non-essentials are costing you each month. This is how much you could be saving each month, and putting towards your debts. You might not even have to cut back on everything - if you`re falling £30 short of meeting your debt repayments every month, cutting back on something of that value will make up for the shortfall (although it`s always a good idea to give yourself some leeway in your budget).

Of course, cutting back won`t be enough to help everyone. If you find you can`t reduce your spending by enough to make a difference, you may want to consider taking more specific action to tackle your debts.

If none of the above can help you, then you should contact a professional debt adviser for further advice on how to clear your debts.

A debt adviser can offer guidance and advice on a range of debt solutions, each of which is designed to help people in different situations and with varying levels of debt. It`s important that you understand the pros and cons of each, and your debt adviser will be able to help.

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