If your costs are more than the money you have coming in, it’s time to make your money habits more efficient. The first step to managing money is to prioritise what you’re spending it on.
Top of the priority list are essentials for living – things like food, shelter (rent or mortgage, plus council tax), heat, light, clothing, any prescriptions you need and your transport costs. You should also factor in essential insurance – vehicle insurance is a legal requirement, and home insurance is often a wise investment too.
Although you can’t practically do without these things, you can think about ways to cut the costs – switching your energy to another provider or shopping around for insurance quotes, for example. Get tips on how to cut back.
Next on your list are important bills that, while not strictly essential, you might only cut back on as a very last resort: things like your phone and internet services, TV licence and channel subscriptions.If all your essentials are taken care of and you have some money to spare, you can then think about paying into savings, or splashing out on luxuries like entertainment, holidays and restaurant meals.