We would all like more money but short of winning the lottery, getting on to ‘Who Wants to be a Millionaire’ or being the beneficiary of some other unexpected windfall most of us just have to make do with the money we already have.

The question is are we really making the most of it?

It is estimated that we waste over £300 million a year in the UK because of poor money management.

Where is this money going?

Here are just a few things that help eat up your hard earned cash:

• Late payments on credit cards.
• Not making the most of savings and borrowings i.e. making sure you getting and paying a competitive rate of interest. 
• Not shopping around for the best deal on insurance and utilities.
• Not returning unwanted purchases.
• Taking out a gym membership and never using it. 

If any of these sound familiar to you it’s time to take action.

But before I tell you how to get on top of your finances, I want to let you into a secret. Being in control of your finances will put you in control of your life. Money gives you power, the power to make decisions about what you do and when you do it, without the stress of worrying how you are going to pay for it. You’ll be a bit better off too.

So where do you start?

Before starting anything you need to make an assessment of where you are at now, that means sitting down and working out how much money you have coming in each month, what your regular outgoings are, what, if any, savings and investments you have and the amount of any debts. It might seem daunting but it won’t be if you set aside some time and keep your focus on the benefits – financial saving and peace of mind.

Once you have a handle on this, work out where you could make some savings. For example, if you have credit card debt are you on a competitive rate of interest? The website Moneyfacts offer a list of credit cards and what rate they charge – you just need to key in some basic information to see if you can get a better deal than you are on at present (http://www.moneyfacts.co.uk/cards/default.aspx).

Same goes with savings, are you getting the best possible return on them and making full use of any tax breaks such as using your cash ISA allowance? Internet accounts offer some of best rates on interest at present but make sure you know who owns the online bank and whether you are covered by the FSA compensation scheme.

One of the biggest savings you could possibly make is by moving your mortgage, which could save you hundreds if not thousands of pounds a year. Talking of savings and debts, one of the most common mistakes people make is to keep money in savings whilst servicing an expensive debt. Unless you are paying less in interest on your debts (apart from mortgages) than you receive on your savings you should use your savings to pay off the debt. Otherwise it is costing you to save!

Once you have made the most of your regular outgoings, it’s time to turn your attention to your day-to-day expenditure. Have you ever wondered where all your money goes? Well it’s time to find out! Most of this expenditure is unplanned so it’s time to start planning. Work out what you need to buy each day and only take enough cash with you to pay for it (i.e. leave the plastic at home).

Next step is to work out what big expenses you plan for the coming year; this could be anything from your annual holiday to buying next season’s wardrobe, paying for Christmas, or putting money aside for your tax bill if you are self employed. Again it comes down to planning so sit down and work out how much you need and how much you need to put aside in a savings account each month to pay for it. Remember to make the most of your savings by shopping around for the best rate. And don’t forget to make use of your cash ISA allowance first, interest rates on ISAs are typically higher than many saving accounts and they’re tax-free!

If you follow these simple steps you will find that very quickly you will be controlling your money rather than it controlling you. The secret is to plan, set your budget in advance and stick to it. But even if you do slip back, don’t worry and don’t give up! Your finances will be on a far better footing than when you started and it would be a pity to let all that effort go to waste.

About Addidi Wealth
Addidi Wealth provide financial planning and independent financial advice as well as a range of wealth management services. It is regulated by the Financial Authority and can be contacted on info@addidiwealth.com or 0207 060 1200


This service is provided by Addidi Wealth Ltd who is authorised and regulated by the Financial Services Authority