Get to grips with your money

Whether your finances are a bit under the weather or fighting fit, it's always a good idea to keep track of your money. Do you know what's coming in, and where it all goes to? Would you be able to find money in a hurry if you had to – to pay an unexpected bill, for example?

Our two easy steps below can help you to take stock of your day-to-day finances and, once you know where you stand, follow our tips on how to make more of your money.

Step 1: Take stock

Find out where you stand by reading our tips on how to check what money you have coming in and work out where your money is going. Use our useful tools to help you.
Setting aside a few minutes a week is all it takes to review your finances. A good way to take stock is to make a budget – list everything that’s coming in and where it’s going. You can use our online Budget calculator to help you do this – either complete it online or print it off fill in by hand.

Have your recent bank statements and bills handy to help you fill it in accurately.
Tips to help you take stock of your money

• Don’t forget occasional items, such as birthdays, Christmas or other festive presents and holidays.

• Think about other things that you pay for once a year, such as car tax and insurance. It's helpful to put in a monthly amount for these, perhaps by estimating and dividing up the average that you'd spend during the year.

• Keep a spending diary – try writing down every penny you spend for a month.

• Check to see if there are any State benefits or tax credits you may be entitled to. Contact the Benefit Enquiry Line or look on the government's Directgov website – see Get more help.

• Make sure you review your budget regularly. If your circumstances change – for example, you get a pay rise or your bills increase – look at it again.

• If you haven’t got enough money to cover your expenses, see where you can make savings. Go to Step 2 for some ideas on where you might be able to do this.

• Once you have worked out your budget, think about your financial goals and when you want to reach them. Use our Financial healthcheck to help you.

Step 2: Take action
Once you know where you stand, take control and make your budget work for you.

Not much money left over?

If you find that you're regularly struggling to make ends meet, you will need to reduce your spending. Our tips below may help.

• Try cutting back on non-essential items. What could you do without to help you get back on track?

• Check the APR on your credit card or loans. This shows the overall cost of borrowing including interest and charges. See if you can shop around for a better deal.

• You may save money by switching services such as phones, electricity or gas to new suppliers. Try Energywatch, the gas and electricity watchdog's website – see Get more help. There are also various internet switching services or search engines you can use.

Getting into difficulties?

You may have the beginnings of a debt problem if you find yourself doing any of the following:

• Using credit to take out cash advances, pay bills or pay your mortgage repayments.
• Being tempted to take out a consolidation loan to reduce monthly payments on servicing your debts.
• Paying no more than the minimum payments due on your credit cards.
• Borrowing money without planning how you're going to pay it back.
Think carefully about borrowing more money to pay off existing debts. It could make things worse.

To find out whether you have – or are likely to have – problems with your borrowing, take our Debt test. It will also give you some tips to help you avoid debt problems or help you tackle your debts if you're in trouble.
In trouble?

If you're struggling with debt, try not to panic – you're not alone and expert help is available. Several organisations offer a free service, either face-to-face or by phone. They will help you set up a budget sheet, prioritise your debts and work out how you can live within your means – see Get more help.

Talk to the people you owe money to (for example, your utility suppliers) if you are having problems paying them back – they may be able to help you manage your repayments.

Whatever happens don't ignore the problem – help is available – see Get more help.
Making your budget work for you
Once you've got your budget sorted, it's time to get it working for you. Here are a few ways to get started.

Think about your financial priorities or goals. They could be:
• In the short term
o Paying off or reducing your debts.
o Saving up for furniture, a holiday, or a deposit for a home.
o Taking out insurance to protect your family or home if things go wrong.
• In the longer term
o Saving for your retirement.
If you need help identifying your priorities, our confidential, Financial healthcheck can help.

Do
1.Be straight with yourself about how much money you've got coming in and how much you spend
2.Review your budget if your circumstances change to make sure you’re living within your means
3.Find out if you're eligible for State benefits or tax credits and claim them
Don't
1. Put off dealing with your finances until tomorrow
2. Overstretch yourself by spending more than you can afford
3. Ignore the problem if you are struggling with debt – get specialist help now