3 Ways to Get Better Control Over Money

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Whether your budget is larger or small, money issues are notorious stress generators. Developing strategies to understand how money flows through your life can help you harness its power and get better control. Once you’re in control, stress levels go down and money becomes a more enjoyable part of life.

Reduce Your Spending

If you want to increase the amount you can save, you have two options: increase your income or reduce your outgoings. Neither sound particularly easy, but even the most careful people probably have some unnecessary expense they could cut down. 

The trick is finding the danger spots. Here are some areas to investigate:

• Scour your bank account for random direct debits on subscriptions you don’t need any more. Prime candidates are small sums we often pay to insure electrical items. Because they might only be a couple of pounds a month, they’re easily overlooked. Sometimes you can forget them completely and be paying for insurance on items you no longer own. 
• Avoid impulse buys. Those tempting items can be anything from a chocolate bar to a new camera. Any time you find yourself tempted to buy something you hadn’t planned for, walk away for a few minutes. Sometimes that’s all you need to remove temptation and get some perspective back. If you decide you really do want it, you can go back and get it knowing you’ve made a rational decision and you won’t have buyer’s remorse. 
• When it comes to days out or entertainment, try and stay local. Make use of community social media pages to find low cost or free events instead of going further afield. It’s all too easy to overlook what’s on our own doorstep but supporting local ventures saves money on travelling, and we’ve all had a bit of practise with staying local over the last year or so.

There are plenty more tips for cutting back on spending here if you want more ideas.

Photo by Josh Appel on Unsplash

Learn Simple Bookkeeping

You can learn accounting to improve your career and income prospects or simply to understand how money works and how you can have better control. It’s never too soon or too late to borrow strategies from business accounting that show how to track and analyse your finances. 

At its most basic, bookkeeping is simply about monitoring income and tracking it against expenses. Slightly overspending on your budget won’t hurt much at first, but over time it can lead to debt that’s stressfully hard to manage. 

When you track what you’re earning and spending, you know you’re staying within budget, and can make better decisions on those occasions when you need to deal with extra expenses. 

You need to watch just four aspects of your income. You can do this with four columns on a sheet of paper and add an extra column to record the date, so you know when things happened.

Here’s the information to gather:

• How much you spend. This is your ‘cost’ column.
• How much you earn. This is your ‘income’ column.
• What you’re buying. This is your ‘item’ column.
• How much money is left. This is your ‘balance’ column.

Create your columns and fill them in each time you spend or earn money. By doing this for a few months you’ll build up a reliable picture of your spending pattern. And from there, you can start rearranging or changing different areas of spending or earning to maximise your control over where your money goes. 

You can, for instance, see how much you spend on entertainment or on groceries. If necessary, you can look for cheaper alternatives. It’s very empowering and great motivation to carry on when you can see in black and white how much you’re saving each month. 

Budget for Expensive Items or Emergencies

As well as managing your daily finances, it’s also important to factor in expenses that crop up regularly but not necessarily monthly. Examples could be car maintenance or bills you pay quarterly or annually. Take those amounts and divide them up to create more equal monthly spends you can spread out over the year.

Setting up a rainy-day fund is also a financial stress buster. It’s very comforting to know you have money set aside for emergencies such as broken household appliances or sudden leaks in the roof. If you assume you’ll need to replace one appliance every year (you probably won’t but it’s a reasonable starting place), you could divide the cost of that item by twelve and set aside that amount each month in a contingency fund.

Managing money can actually be a fun exercise and become something of a personal game. Approach it with a light heart, even though its aim is serious, as you experiment and investigate ways of controlling your money. If you enjoy managing your own funds, you could even consider a new, well-paid career in accounting, either with a company or to start your own business. It’s even possible to learn accounting online where you can fit study around the rest of your life.

The more you understand about the relationship between spending and earning, the more you can control money and enjoy finding ways to make it work harder for you.