Household Budgeting.

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    Setting up a budget.
    If you want to get on top of your finances, a budget is a good way to start. It’s just a record of money you have coming in and money going out.

    A great way to work out your budget is with an online planner. This allows you to record all of your incoming and outgoing money. It then analyses your figures and gives a breakdown of where your money goes across the following categories.

    Household bills.
    Living costs.
    Financial products.
    Family and friends.

    Alternatively you can set up a budget by using a spreadsheet on your computer or just simply write it down on a piece of paper. Your bank or building society may also give you access to a budgeting tool.

    If you are spending more than you’re earning the first thing to do is look at where your money is going, and where you can cut back. Even small things like daily papers, sandwiches for lunch, magazines, takeaways can all add up.

    Keep a spending diary.
    Keeping a spending diary is a good way of keeping track of what you spend your money on. Try making a note of what you spend and on what for at least a month and preferably longer for a better picture.

    Once you have a clear picture of where your money is going it will make it a bit easier to make cutbacks.

    Paying off loans and credit cards.
    If you have loans or owe money on your credit cards it usually makes sense to pay off the debt that charges the most interest first, it’s the fastest way to clear your debts. Knowing this is useful if you have several different debts charging different rates of interest such as:

    Store cards, they normally charge the highest rates of interest.

    Credit cards.

    Personal loans from the bank which normally charge a lower rate of interest than store cards.

    It is important not to break any terms of agreement as this could lead to penalties which could incur more interest thus resulting in further debt. Sometimes it may seem easiest to bury your head in the sand so to speak and ignore demands for payment, but it won’t make your problems better only worse, and inevitably you will have to face them one day.

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