The best way to take control of your finances is to start by setting up a budget: a record of money coming in (e.g. salary or benefits) and money going out (e.g. rent and living expenses).
Recording income and expenditure will give you a clear picture of your financial situation, avoiding nasty shocks when you receive bank statements or bills!
You can then analyse your finances and take appropriate action.
‘Over half of UK households keep a regular budget. Most of those who do say it gives them peace of mind about how much they are spending, and makes them feel better about life in general.’
Money Advice Service research
A budget enables you to check 2 key questions:
Are you living within your means?
Do you have spare cash, or are you spending more than you earn (eating into savings or running up debts)?
How much can you afford to spend?
How much spare cash do you have left after paying your essential bills? What are your priorities? Where can you cut costs if necessary? Can you afford to put away regular savings?
Once you know where your money is going, you can prioritise your spending, to ensure you live within your means and avoid getting into serious debt.