Times are tough, and our bills are getting bigger. Our belts are becoming tighter yet we have a lot less disposable wages to help us. As a result of this we are seeking the services of financial advisors to give us first-class Debt Management plans.

How many of us each month simply work out how much we have by the figure that shows up in our current account? Or even worse how many of us are continuously relying on our overdraft instead of managing our accounts more effectively? Before we get to the point that we have to deal with things like a Scottish Trust Deed or Debt Management Consolidation loan to bail us out, let’s see if we can take responsibility.

How may we plan wisely? Well keeping track of your incomings and outgoings will inform you how much disposable wages you have each month. I for one have an excel worksheet with up to a year’s activity. It might look a little extreme but for the next twelve months I know the basics of what I have to pay out for for like rent; council tax etc also I know accurately what disposable wages I have.

I can prepare for things like as holidays, anniversaries, car maintenance etc and not be concerned that I have overstretched myself. I know if I have by checking further down the months. It in addition will mean I know when bills are due. We get paid at the end of the month so I know that I have got X amount to cover for the next month. When I get paid I then go through and pay all the bills that do not need to wait. I tend to reason why pay a bill on the 15th if you can pay it on the first. It won’t make a difference to how much money you have left spare and you won’t have to be concerned that you have forgotten to pay for it.

I have in addition set up direct debits or standing orders for things like rent and council tax, the food budget etc. Following my experience with forgetting the petrol bill, I am currently contemplating setting one up for that also.

You may assume that things like petrol and food will fluctuate each month so why set up a direct debit? I would say that it is better to pay something than nothing. In case you do fail to rememberto pay a bill then at least you know something has been paid and you won’t incur a late payment charge. Just make sure it is always more than a minimum repayment. If you do not forget then all you have to do is pay the extra.

As an example let’s say we spend £200 a month on necessary groceries but would like to allow a little extra for some niceties. Set up a direct debit for £200, but budget for £250 on your table. By allowing for a little extra on your table you will see whether this overstretches you or not. If it does not then you know that after the £200 has gone out the bank, all you have to do is pay the £50 to pay the rest off.

The trick is to be certain you don’t go over your budget and that you always pay off in full. It’s good quality Debt Management practice and will keep your finances is excellent health.

If we’ve already reached financial crippling then don’t dismiss the thought of a table to help you budget. Even if you’ve a Scottish Trust Deed, you can see after the month-to-month payment goes out each month, what you have to work with each month. The same applies with a Debt Management Consolidation loan or transferring your credit card debts into one more manageable debt. By putting it all down on ‘paper’ we manage our money and ultimately our lives better.

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