Managing money is an important skill that can help you to live more independently. It can give you more control over your life and help you feel more confident about your future.
Everyone can learn to manage their money better, so whether you’re planning your budget, or just learning how to handle your finances, this guide is here to help you.
Understanding bank accounts
A bank account is a secure place where you can store your money. It allows you to deposit funds, withdraw cash, and manage your finances efficiently. There are different types of bank accounts, each designed to meet specific needs.
When you open a bank account, you will receive a bank card and access to online banking services. These tools make it easy to monitor your account, transfer money, and pay bills from the comfort of your home.
- Managing your own money – Scope
- Accessible bank accounts and services – Scope
- Getting a bank account – Citizens Advice
- Banking – security and fraud – Citizens Advice
Budgeting
A budget is a plan that helps you manage your money. It shows how much money you have coming in (income) and how much you are spending (expenses). Budgeting helps you make sure you have enough money for the things you need and want.
Why is budgeting important?
Budgeting is important because it helps you:
- stay in control – know where your money is going
- save for the future – set aside money for future goals or emergencies
- avoid debt – spend within your means and avoid borrowing money
Creating a budget
Here’s a simple step-by-step guide to creating your own budget:
- List your income: Write down all the money you receive. This could be from a job, allowance, or any other sources.
- List your expenses: Write down everything you spend money on. This includes things like food, transportation, entertainment, and savings.
- Categorise your expenses: Group your expenses into categories such as needs (rent, groceries) and wants (movies, eating out).
- Compare income and expenses: Subtract your total expenses from your total income to see if you have money left over or if you need to cut back on spending.
- Adjust as needed: If you’re spending more than you earn, look for areas where you can reduce your expenses.
Tracking your spending
Keeping track of your spending helps you stick to your budget. Here are some tips:
- Use a notebook or app: Write down or record every purchase you make.
- Review regularly: Check your spending weekly to see if you’re staying on track.
- Adjust your budget: If you find you’re overspending in one area, adjust your budget to better reflect your spending habits.
Tips for sticking to your budget
- Set realistic goals: Make sure your budget is achievable.
- Reward yourself: Give yourself small rewards for sticking to your budget.
- Stay flexible: Life changes, and so should your budget – be ready to adjust as needed.
Budgeting might seem challenging at first, but with practice, it will become a valuable tool to help you manage your money effectively.
Budgeting resources
Dealing with debt
Debt can be overwhelming, but there are steps you can take to manage it effectively. Remember, you’re not alone, and there are many resources and people ready to help you. Both Citizens Advice and MoneyHelper offer free services where you can chat with a debt adviser.