Set a budget
The first step to taking control of your finances is doing a budget. You’ll need to set aside an hour or more to do this and gather together your paperwork (bank and credit card statements, payslips etc).
You’ll start by working out how much money you have coming in and going out. From this, you’ll see whether you have spare money to save or whether you’re ‘in the red’ – spending more than you earn.
There are plenty of online resources to make budgeting easy. Here are a few suggestions or you can search the web for ‘budget planner’:
- Citizens Advice
Quick and easy online budget planner with suggestions for how you can cut down your spending. You can’t save your results but you can print them or save them as a PDF.
The Which? experts explain how to plan a realistic budget by working out your income and outgoings.
If you're in the red
If you're spending more than you earn, now’s the time to balance your income and outgoings.
It’s easy to create a budget (see above) – the tricky bit is sticking to it. But it’s the only way to make sure you’re not overspending.
If you’re in debt, it’s time to be ruthless:
- Make savings wherever you can
Cut out take-away coffees, use restaurant vouchers, walk instead of drive and so on.
- Consider ways to earn more
Could you take on a part-time job, rent out your spare room, join a research panel? If you are considering these please make sure you ask for advice beforehand.
- Sell things you don’t need
Try Facebook, an auction website or a car-boot sale to sell clothes, furniture, fitness equipment, CDs, books and more.
Do whatever you can to reduce your debts, especially any which are racking up interest or charges.
For people who continue to spend more than they earn, it becomes a vicious circle - their debt grows larger and it becomes more difficult to pay it off.
If you're in the black
If you're earning more than you’re spending, it’s still sensible to make sure your money is working hard for you. Are you putting enough aside for unexpected expenses? Could you cut down your expenditure and save more? If you’re sweeping money into a savings account, is the interest rate still competitive?
- Here on our website, you can compare our savings accounts with similar accounts in other UK providers. Go to the type of account you’re interested in (Easy access, Bonds, Cash ISAs, Everyday money) and use the ‘Compare our accounts’ feature.
(Remember: there’s more to a savings account than just the interest rate. Compare access terms, how to pay in and other criteria – then make your mind up.)
You can also look around for the best deals.
Some debt is fine
Not all debt is ‘bad’ – if you have a repayment mortgage, this is an acceptable debt because you’re on your way to owning your home. And many people use a credit card to make larger purchases so they’re covered by the provider’s guarantee – as long as you swiftly pay off what you owe in full, you won’t pay interest on these purchases.
In fact, having a credit card and/or a mortgage and demonstrating that you manage these well can enhance your credit score.
If you’re struggling…
If you’re overdrawn on your Coventry Building Society account, or you have a mortgage with us and you’re struggling with your finances, talk to us . The sooner you tell us, the better because it’s likely we can help you by working out a repayment plan to suit you.