How to manage your money and save money

Managing a household means managing the household budget. Read our eight top tips for effectively managing your budget & saving money throughout the year.


Blue piggy bank against blue background for how to manage money and save your money

Key steps:

  • Keep an eye on in and outgoings – it’s the first step to good money management
  • Cut back where you can – being frugal doesn’t have to mean going without!
  • Sell on what you no longer need, and buy second-hand wherever possible.
  • Consider purchasing cleaning products that are refillable, such as Cif Refill

It can be tricky juggling your finances, especially if you have a family to budget for. Which is why we’ve gathered together the best tips to save money all in one place – just read on to learn how save money throughout the year.

If you haven’t worn an item of clothing for over a year – sell it! So many of us hold onto clothes we don’t actually need or want anymore, why not make some money from it?

How to make a budget

One of the best ways to save money is to create a family budget and it’s easier than you’d think. Here’s how:

  1. Keep a spending diary for a month. Use a spare notebook and write down every purchase you make during the month, including card payments and cheques.
  2. At the end of the month, categorize your spending. Use subheadings like rent, utilities, entertainment, food, travel, and so on. This will help you see where you spend the most and identify areas where you might be able to cut back.
  3. Compare the total spend to your monthly income. This will determine whether you are living beyond your means. Bear in mind some months are more expensive than others!
  4. Make a list of annual expenditures. Write the months of the year on a sheet of paper and enter the dates and amounts of annual payments like car tax, or periods of heavy expenditure – like Christmas – for the previous year.
  5. Work out how much you should be saving each month. Divide the large annual payments by 12 to get the average amount extra you should be saving per month. Don’t forget to anticipate any future large payments – like holidays – that are not on your list.

Tips for keeping to your budget

There’s no point in making a budget if it’s not realistic and you have no intention of keeping to it! Here are some helpful suggestions of how to keep family costs down and maintain better control of your money.

  • Round up all your figures. When you make your budget or are recording how much you’ve spent be sure to round up to the nearest 10 pounds. This way you’ll be building yourself a small cushion of money without even knowing it. This will help, if costs come-in higher than you anticipate.
  • Open more than one bank account. It’s harder to spend money if you don’t have immediate access to it! Consider opening a savings account for big annual expenditures, leave your main account to handle direct debits, and transfer a monthly sum to a current account with a debit card for everyday spending.
  • Get rid of credit and store cards. As much as possible, don’t live on credit! Not only will you eventually have to pay everything back with interest, it’ll be incredibly difficult to keep track of how much you’re actually spending.
  • Organize direct debits and carry cash. It’s best to use direct debits for predictable monthly expenditure like utility bills – this will keep your financial admin low and you won’t be able to spend money that has already been debited from your account. For daily expenses, consider withdrawing cash on a weekly basis – if you limit yourself to spending only what is in your is in your purse you’ll be surprised at how much money you’ll save!
  • Get to grips with want vs. need. If you’re really serious about saving money, you’ll need to think about what really constitutes essential spending – it’s all to easy to get tempted to buy new things when you don’t actually need them, or eat out when you can dine at home for half the price. If you ask yourself, ‘do I want, or do I need this’, every time you think about making spending money, you might make yourself some considerable savings.
  • Shop wisely. Although it takes a bit of effort, do research before making purchases and you might just bag save yourself quite a bit of cash. Look for coupon codes on the Internet, check the difference between Internet vs. in-store prices, wait for the sales, bulk-buy your favourite items, and investigate which in-store brands are as good more expensive named goods.
  • Barter, upcycle and buy second-hand. Saving money can be good for the environment and your local community too. Find a local skill-share and exchange your typing skills for gardening help for free, trawl your local charity shops for bargains, check online freecycle websites for items you can upcycle – you might even consider growing your own fruit and veg, instead of buying it in the shops.

Originally published