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Image courtesy of Rambergmedialimages

If you’re looking to save money, or even simply remain in the black at the end of the month, then there’s no doubt about it: you need to have a budget plan. No matter how much you earn from month to month, your wealth and financial stability isn’t determined by what money you do get – it’s determined by how well you handle that money.

Firstly, you’ll need to collate a realistic list of all your monthly expenses – food, utilities (water, gas, electric), phone, TV, Internet, clothing, leisure, car (fuel, maintenance and insurance), loan and/or credit card repayments, rent or mortgage, and any other insurance policies you might hold. Similarly, you’ll need to collate a rundown of all your monthly incomings (this one’s usually a bit easier..!).

With these two lists, you’ll now be able to calculate your outgoings against your incomings, and not only that – with it all in front of you, you can prioritise exactly what you’re spending your hard earned money on.

Based on all this newly-organised info, you’ll now be able to see which expenses are fixed and which expenses can vary from month-to month. As you’ll be able to see, your fixed expenses will be things like rent or mortgage, utilities, phone, TV, Internet, loan repayments andinsurance policies. Your variable list will contain items that will change each month, like food and perhaps utility bills, leisure and clothing – just anything that you can see isn’t a fixed price each month.

When doing this, you might discover that some of your bills seem a little high. Shop around for good interest-free deals on credit transfers, and take a look at what kind of deal you’re getting on things like utilities and insurance policies – it’s a really competitive market out there, and you could be missing out on some great deals just because you’re not checking what’s out there.

For example, something like the moneysupermarket.com home insurance comparison tool works to search the company’s database, bringing up a whole host of competitive quotes in a matter of seconds. Very handy if you’re looking to re-evaluate which companies you’re giving your money to. This is a great time to do your research and make some changes.

Deduct the fixed expenses – the unavoidable monthly costs that won’t change –from your income.Now look at the total of your variable costs – take an average of what those variables can be from month-to-monthand deduct that from your income, too. Anything left over, you can either pop into a savings account or use as a contingency each month.

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