If you ask people what their biggest issues are in their adult lives, a significant percentage of them are likely to say that keeping on top of their finances is right up there. No matter how hard you try sometimes you just don’t have the money you think you should have and you can’t work out where it’s gone and that’s the case for both business owners and the general public looking to work out how much is in the bank and how much they can afford to spend.
Everyone has different ways of looking after their own money – others just take each day as it comes only spending what they can afford even if they are referred to as being ‘tight’; but provided they can pay all of their bills and they can afford to go shopping, put fuel in the car and buy the things they need, they’re happy.
As mentioned, everyone is different and there is no one-size-fits-all way of organising your money to make you more financially stable. Here are a few of the common ways of taking charge of your finances to help you to get into some kind of order but remember, it’s all down to personal preference and finding something that works for you and your family or business. Some will sound complicated, but once you find a method that works it will soon become second nature:
Spreadsheets
Making up a spreadsheet is a great way of getting everything you earn and owe down on paper. By including all of the essential expenses like credit card payments, rent or mortgage payments, car insurance, phone bills and utility bills you can work out how much you HAVE to spend each month; and then you can factor in the likes of fuel and money spent on food shopping to see how much you ARE spending. The total figure can then be subtracted from your income to see how much you have left and where you can make savings.
Accountants
In a business case, accountants are the ideal solution. Sure, you can pay for a personal or family accountant but they’re more suited to working with businesses and ensuring that they’re managing their finances correctly. The likes of Alexander & Co deal with businesses of all sizes from startups right through to large agencies so they’re an example to show that there are accountants out there willing to deal with any business no matter how much is coming in or going out.
HMRC Calculator
Monitoring tax payments is difficult and something that is easy to forget when you’re trying to run a business or monitor your freelance expenses. If you’re providing a service to someone in which you receive a payment you are technically classed as self-employed and you will have to declare it to HMRC, who have provided a calculator on their site to help you work out how much tax you owe on your earnings.
Budgeting
Back to a personal finance situation, you can take your spreadsheet concept and take it one stage further. Having worked out how much you have coming in, going out and left over each month you can establish how much money you have ‘available’ between that date and your next expense or salary payment. It’s usually best to do your budgeting at the end of the month when you know that your monthly payments have all gone out and you have received your salary for that month. You can then take the ‘available’ figure and divide that by the number of days you have until pay day to leave you with a daily budget.
