Times are hard, and our bills are getting larger. Our belts are becoming tighter yet we have less disposable pay to assist us. As a consequence of this we are seeking the services of financial advisors to give us decent Debt Management plans.

How many of us each month only work out how much we have by the total that shows up in our current account? Or perhaps worse how many of us are continuously trusting on our overdraft instead of managing our funds more effectively? Before we get to the position 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 can we plan wisely? Well keeping track of your incomings and outgoings will tell you how much disposable pay 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 12 months I know the fundamentals of what I have to pay for for like rent; council tax etc furthermore I know accurately what disposable pay I have.

I can prepare for things like as vacations, anniversaries, vehicle maintenance etc and not fret 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 following month. When I get paid I at that moment go through and pay any bills that do not need to wait. I tend to rationalize why pay a bill on the 15th if you can pay it on the first. It will not 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 also set up direct debits or standing orders for things like rent and council tax, the food budget etc. Subsequent to my experience with forgetting the gas bill, I’m currently thinking of setting one up for that too.

You could think that things like petrol and food can vary each month so why set up a direct debit? I would say that it’s better to pay something than nothing. In case you do forgetto pay a bill then at least you know something has been paid and you will not incur a late payment charge. Just make sure it is a bit 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 allocate a little in addition for some niceties. Set up a direct debit for £200, but budget for £250 on your spreadsheet. By allowing for a little extra on your spreadsheet you can actually 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 ensure that you do not go over your budget and that you always pay off in full. This really is high-quality Debt Management practice and will keep your finances is decent health.

If we have already reached financial crippling then do not dismiss the thought of a spreadsheet to help you budget. Even if you have a Scottish Trust Deed, you will 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 convenient debt. By placing it all down on ‘paper’ we deal with our money and ultimately our lives better.

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