With Christmas in the rear view mirror, our attention turns to the end of 2017 and beginning of a New Year with new possibilities. With the bank holidays coming up, it would be beneficial to take time out to organise your finances for the coming year. Making up a budget is vital, as more and more of our transactions are conducted through cyberspace, and more monthly bills are automated. It is now more difficult to keep track of your money.

Below are three basic steps that will help give you more control over your money in 2018.

  1. Compose a monthly budget – There is no getting around it, this is your starting point for analysing your financial situation. You can use dedicated software, Microsoft excel or even pen and paper.

 Your basic budget is just two lists of income and expenses. Then with expenses, you need to decide what is fixed (Things that need to be paid) and optional (Where you have more of a choice)

Once you have your budget, all you need to do is minus your total expenditure from your income, and that tells you everything you need to know about your financial situation.

  1. Review your credit – Any debt should be on your fixed expenditures. Make sure you check your own credit report, this is very important, if there is something not updated then it will cause problems for you.

Once you have your credit report, you can now prioritise which balances you wish to clear. One of the basic strategies is to start with the lowest balance, and get that paid off first. Your credit report can affect big purchases, and prospective landlords and employers can include this in their background checks.

  1. Cut expenditure – In step 1, you separated your optional expenses from your fixed expenses. You are now able to see which optional expenses you can spend less on to save money. This is where you have to be both creative and ruthless, by asking the tough questions of whether this spending is necessary. With fixed expenses, be diligent by checking to see if you can get a cheaper mobile contract as one example. You would be surprised what can be negotiated.

These are only basic steps towards improving financial health, and it takes a great degree of patience and frugality. Creating a budget is something that everyone should do, and the other two steps is up to each individual to decide what is best for their own situation. If you have any questions regarding savings or loans to consolidate existing debts then you can always contact your Credit Union for more information.