How to Control Your Finances Better – A Comprehensive Guide
No one likes being broke, least of all me. So hopefully, this guide will help you save money and control your finances allowing you more personal freedom when it comes to your money.
Step-1 Financial Analysis
The first step is to analyse your personal finances. You will want to go back through your finances over the past couple of months and look at both your incoming and outgoing finances. This is really important as it will allow you to see all of the payments that are going out of your account and also how much you have coming in. It’s important to know how much is going out of your account and what exactly is going out of your account so you don’t find yourself struggling.
Things to Look Out For
- Monthly subscriptions for Services
- Debts/Loans
- Unknown Payments to God Knows Where
- Takeaways
- Vending Machine Spends
- Unnecessary Spends
- Pay Over Time Services
- Micro-transactions for Games
You will want to seriously consider each of these things and deal with them in the following manner:
Monthly Subscriptions for Services
If you order things on Amazon, you will probably find that you end up paying for Amazon Prime a lot. This service is great but if you don’t use it regularly, it can be a creeping damage over time effect on your finances. Every month, you may end up paying for Prime, and cancelling it is an absolute nightmare as there are so many steps. It’s easy to sign up for, hard to cancel… (This in my opinion is dodgy marketing, so here’s how to cancel!)
Do you pay for Netflix, Disney Plus or any other streaming services? This is going to be costing you money, so if you don’t desperately need to watch things every single day, it’s worth considering cancelling them to free up more money every month. Mitigate that damage.
Any other services you subscribe to that you don’t NEED, you will want to get rid of!
Debts and Loans
Debts and Loans should be a PRIORITY you will want to pay these off as quickly as possible the majority of debts and loans will cost more the longer they impact on you. If you can, pay off everything when you have the money as this will make it easier to control your finances in the future. You want to avoid any form of debt or loans, and cutting these out can save you. I have experience with both debts and loans, as I was a guarantor for a ‘friend’ who chose never to pay and left me high and dry. I had to work crazy hard to pay it off. I paid off just over £4000.00 quickly rather than allowing it to get to over £9000.00. The HORROR. Pay these off. Never get into debt. My god you have no idea the horror.
Unknown Payments
If you don’t know where money is going, you may want to block these payments. If you see PayPal payments, you will want to go to PayPal and see what exactly you are paying for. You should keep an eye out as many services will try and bleed you for a few quid per month and hide their identities so you can’t cancel them easy. Contact your bank or use your banking app to block unknown payments, especially those ones that reoccur.
Takeaways and Ordering Online Food
Yes, I know, I’m shameful for this. My Deliveroo payments are astronomical. Ordering through sites like Just Eat and Deliveroo is really toxic for your finances. A lot of restaurants increase prices so they can afford to survive using these platforms. Believe me, I know, I do restaurant marketing. Instead of using these services, you should consider eating meals you prepare yourself. Even if it’s just a couple of pot noodles when you want a quick filler. (I recommend Pearl River Dark Mushroom Soy Sauce which makes cheap noodles almost taste as good as a chow mein.) By cutting out expensive orders you will do better financially. I also recommend if you HAVE to have a take-away to order from restaurants. Many of them will give you cheaper food if you just call them up. Also pay cash in hand, they appreciate that.
Vending Machines
A lot of modern vending machines have the option to pay by card. Try to avoid using them unless absolutely necessary. I had a great vending machine at work which always said: Thank you! When I ordered from her, it was a whirlwind romance until someone snuck in overnight and murdered her for her sweet juicy snacks. Looking back at the costs though, I was spending around £3-8 per shift at the place and it was almost costing me half a shift’s worth of work monthly. Eat before you work. If you NEED snacks, get them from a shop on deal.
Unnecessary Spends
Anything you are paying for that you don’t need, you will want to stop paying for. This includes things you’re addicted to. I’m a smoker, a vape user, I drink energy drinks regularly. None of these are necessary in my life, don’t be like me. Get in shape and don’t spend where you don’t absolutely need it. I’m trying to cut down!
Pay Over Time Services
These are called buying things on finance. They’re absolutely evil, as even though you are paying sometimes the same amount, this is the kind of thing that catches up with you. Let’s say you buy a couch, one month, and you’re paying for 6 months, then you buy a bed, and a chair. You’re only feeling this little chip month by month, and it’s probably barely noticeable, and it feels more ‘manageable’ but these expenses build up faster than you may be able to handle, so be careful and always buy things outright.
Micro Transactions for Games
From my experience having spent over £7,000 on skins in League of Legends, a game I no longer play, having those extra skins is NOT worth it. You do not need to pay for games that offer micro transactions. It’s better to buy and play a game outright. A lot of people get caught up in phone games, but these are an absolute killer when it comes to the wallet. If not, you will be watching enough ads to drive a sane person crazy. Games are fun but they kill our productivity too.
Step-2 What You Need Vs What You Want
Once you know what is coming in and going out, you should think about which of these services you actually need vs what you just want, those little luxuries. You absolutely need to control your debts, and pay off everything that you have to because this will increase your income every month. Remove all the unnecessary services that you aren’t using, block all outgoing payments that you don’t really know what you’re paying for and if it’s really hard, just cut down month by month. Set a focus for removing the things that are costing you money and use the money you gain to help get your finances under control.
Step-3 Set A Financial Goal
Setting yourself a financial goal is really helpful. I find that working towards something that I really want that is expensive is a great motivator when it comes to working. At the moment my current financial goal is to become a landlord, so I’m saving up for another house. This keeps me motivated to going and doing every extra shift I can, taking on more jobs and earning. Once I’ve saved up completely for the house, I’ll decide weather or not I really want it, but I won’t get distracted. This has vastly increased my income.
Think about it like this: If you are able to save £100 per month, then working more shifts will earn you £200 more in a month. The result is an income of £300 in a month which is the equivalent of working normally for three months without doing extra. Food for thought.
How These Steps Helped Me:
Before I started keeping an eye on my finances, I was really struggling like hell. I was paying for a tonne of things I didn’t really need and distractions that got in the way of my life. I was paying for so many things that were not beneficial in the slightest. Now I’m doing a lot better in life, and it’s all thanks to taking the time to go through my finances and figure out exactly what I need to do to control things. I’ve cut down on the things that were impacting negatively on me.
- I no longer pay for games I don’t need. I just play the ones I have in my free time, or games I liked from the past that I get on Abandonware websites, which are mostly free. Shout out to Realmz by Fantasoft, Exile III by Spiderweb software and Baldur’s Gate II is exceedingly replayable if you do want to buy games.
- I have cut down on my consumption of alcohol, cigarettes, vapes, and energy drinks. This has led to me having more money and being in (slightly) better shape.
- I rarely use delivery services. Their ease of use is toxic.
- All my subscription services are now gone, though I still pay for things like the websites I run.
- I have no outgoings I don’t understand and any I do have are squashed immediately.
- I discovered better ways to cook for myself at home with quick meals, and reduced what I spend on food. Two pot noodles with that delicious soy sauce fill me up for around £2.30 per meal rather than spending almost £20.00 to order McDonalds.
- I now have money.
