How to conduct a review of your household finances

Managing household finances isn’t easy these days. There are so many different costs to calculate, and you might feel as you though you need a finance degree just to balance your budget. However, as long as you’re methodical in your approach, you should be able to stay in control. To make your life easier, it helps to conduct a review of your finances – and here’s how:

Make a list of your expenses

First and foremost, make a list of your monthly expenses. This should include things like your mortgage or rental payments, utility bills, insurance costs, tax bills and living expenses. Once you’ve noted down all the outgoings you can think of, add them together. If the total sum sends your blood pressure soaring, it may be time to think of ways to cut your spending. For example, could you get a better deal on the products and services you use? One simple way to save cash may be to enlist the assistance of an independent broker like Chill Insurance to help you find the most competitive deals on cover for your home and car.

Consider keeping a spending diary

Keeping tabs on regular outgoings is one thing, but in order to work out exactly how much money you spend, it’s helpful to make a note of irregular expenses too. A great way to do this is to keep a spending diary. For at least a month, make a note of all your purchases. It might seem tedious, but this will help you to gain a much fuller picture concerning your buying habits. It can also highlight any areas where you need to rein your spending in.

Calculate your income

Next, it’s time to calculate your total income. As well as your salary or wages, make sure you include any relevant pensions or benefits. Knowing exactly how much cash you have coming in each month will help you to assess whether or not your financial situation is sustainable.

Don’t simply stick your head in the sand

If you discover that you’re spending more than your income allows, it’s easy to panic and you might be tempted to stick your head in the sand and simply hope that the problem goes away. Unfortunately, it won’t. By failing to deal with household budget problems, you’ll only serve to make things worse.

Bear in mind that there is help and information on offer. For example, if you’re struggling to pay so-called ‘priority debts’, like your rent or mortgage, council tax or child support, and you’ve missed payments, you can seek advice from a reputable debt charity.

Conducting a thorough financial review of your finances might take a little time and effort, but it’s well worth doing. It can help you to control your spending and prevent you from living beyond your means.