Writing out a thorough budget detailing all your incomings and outgoings is the only way to get a realistic picture of your financial situation.
It will tell you if you are spending more than you are earning, and where you need to make savings.
Here is how to draw up a budget that will show you exactly where you stand.
If you have credit card debt, you need to make sure you are paying as little interest as possible.
Look at your credit card statements to find out:
What your outstanding balance is
How much you are repaying each month
What interest rate you pay
If you are being charged a high rate of interest, try to move your balance to a 0% balance transfer credit card.
This could give you more than 40 months of 0% interest in which to pay off the balance of your card, however many charge a fee of up to 4% of the outstanding balance.
Here is everything you need to know about how balance transfers work.
Remortgaging could save you hundreds or even thousands of pounds a year if you find a better deal. Use our remortgage comparison to find a lower rate.
You may be charged an early repayment fee when you pay off your old mortgage, so work out if the saving is worth it before you remortgage. If you are on your lender's standard variable rate, you should be able to switch to a cheaper deal without paying a fee.
If you use your current account's overdraft facility you could save by switching to an account that charges a lower interest rate, or smaller fees.
Some accounts come with free overdrafts that do not charge any interest when you use them.
If you have outstanding loans, look at how much interest you are being charged because you could pay less with a consolidation loan.
You can use one to pay off all your existing loans, so you have one payment to make. Look for a consolidation loan that charges a lower rate than you are already paying.
Switching your energy supplier could save you more than £200 a year on your bills.
Changing your current account could save you money, and some can even earn you some extra cash too.
If you always have a positive balance, look for a high interest current account that could earn you extra money.
If your contract has come to an end, make sure you shop around for the best broadband deal.
You could even switch provider during your policy if you find a much cheaper deal. However, you may be charged a fee of up to £80, or have to pay the remainder of your contract.
You could save money by switching your landline to a cheaper plan. You can compare landline deals to find the best contract for you at the right price.
By shopping around and comparing quotes, you should be able to find cheaper insurance deals and cut your premiums.
Never let any policy roll over automatically when it ends, because you will not be getting the best deal.
Use our comparisons to find the best deals for your:
Make sure you are not paying more tax than you should be:
Council tax: Check your council tax band because you could be paying more than you need to. Here is how to check if you are paying too much council tax.
Income tax: Check your tax code to make sure you are being taxed the right amount. Here is how to work out if you are paying too much income tax.
If you find out you have been paying more tax than you should, you might be able to claim it back. Here is how to claim your tax back.
Check to see if you could be claiming:
Universal credit: This has replaced a number of benefits, and you could claim for this if you need income support or housing benefits. Here is how universal credit works.
Winter fuel payments: If you are over 63, you could claim up to £300 to help cover your winter fuel bills. Find out if you could be eligible here.
If you are not sure which benefits you are entitled to, you can use the entitledto.co.uk benefits calculator, which can show you what you could be claiming for.
If you are spending too much, you may need to cut back on a few things to get your finances back on track. Try to spend less on things like:
Groceries, e.g. buy cheaper brands or try a different store
Entertainment, e.g. spend less on going out or reduce your TV subscription
High street shopping, e.g. cut back on electronics, clothes and beauty products
Travel costs, e.g. lift share to work to spend less on petrol
These changes can be harder to make because it may mean cutting back on the things you enjoy, but they may be necessary to get your finances into shape.
When you have been through your finances and made some savings, or increased your income, go back and write another budget from scratch.
If you were overspending before, hopefully you have been able to cut your outgoings enough to see an underspend each month.
If you have reduced your debt payments, switched to cheaper deals and cut back your day-to-day bills but are still overspending, you may need to seek debt advice.
Here is how to get free debt help, including which charities could help you.
Go through our ultimate checklist and see how many you can tick off:
Write a budget
Pay less for your credit cards
Reduce your mortgage rate
Cut your overdraft payments
Consolidate your loans
Change your energy supplier
Switch your current account
Swap your broadband provider
Get a new landline deal
Pay less for car insurance
Save on travel insurance
Cut the cost of home insurance
Reduce your pet insurance
Check your council tax
Check your income tax
Check universal credit
Check child benefits
Check winter fuel payments
Use a benefit calculator
Reduce your grocery bill
Spend less on entertainment
Avoid the shops
Slash your travel costs
Get debt help if you need it
Help stretch your budget a little further by making the most of your savings.