5 tips for looking after your money and repaying debt

These days, looking after your money is as important as it's ever been. With many people's costs of living on the rise, taking good care of your money should be at the top of your 'to do' list - especially if you're in debt.

Here are a few tips to help you to look after your finances while you're repaying debt.

Budget
Budgeting is a simple measure that could make it much easier to take care of your finances. For a monthly budget (suitable if you're paid monthly), all you need to do is add up your total monthly outgoings and deduct this from your take-home earnings. What's left can be safely spent on anything you like.

To be extra careful you may want to put money for outgoings into a separate account at the start of each month, to make sure you don't accidentally spend it on other things. You can find some budgeting tips and other ways of repaying debts without a loan on this website.

Save
Some experts recommend repaying debt before you save, but if you can comfortably afford to do both then you might decide it's a good idea to do just that. Having money in savings means that you're more likely to be able to cope in a financial emergency. Focusing purely on repaying debt can save you money on interest, but you could be leaving yourself without a 'back-up fund'.

However, if your debts are causing you problems then it's best to start by focusing on paying them back.

Cut back
Why not try and make more room for your debt repayments by cutting out a few things you don't need? Most of us spend money unnecessarily from time to time, and any savings you can make could help you to repay your debts more quickly and/or save more.

A few ideas might include cutting out trips to the café before work, or cooking at home instead of buying takeaways at the weekends.

Be thrifty
Don't be ashamed to take advantage of special offers. These offers could save you a lot of money each month, as long as you would have bought that item (or an equivalent) regardless.

Be careful, though - some offers look better than they actually are. For example, you might think a 'three for £10' offer on a £3.49 item looks like great value, but you'd actually only be saving 47p (so probably only worthwhile if you set out to buy three in the first place). The best offers are often things like 'buy one get one free', which mean you're effectively paying half as much as you normally would. Again, it's only really worthwhile if it's something you really want two of!

Avoid temptation
Temptation is something we've all fallen for at one time or another. That new pair of shoes, holiday or games console can look very appealing at the time - but do you really need it? This is something you should ask yourself before you buy anything.

Of course, life would be boring without buying a few things we don't need each month - but if it's going to cause you to struggle in any way, then it's just not worth it.

Comments