You have to start letting your finances rule your lifestyle, not vice-versa.
Be clinical when assessing yourself
To do this, as noted earlier, the task is to sit down for a brutally frank financial self-assessment. We don’t mean a prissy budget looking at a month’s expenditure. That omits the cost of Christmas, summer holidays, MOT tests and more.
We mean scrutinise everything, big and small, over a year, to prioritise what’s important and cutting anything that pushes your spending beyond your income. Use the free Budget Planner tool to do it for you. Yet be warned, it’s the real deal, so set aside two hours and prepare for a sinking feeling when pressing the “Do I spend more than I earn?” button.
Once you know what you’ve got and what you can spend it on, then you need to find a way to stick to it. An easy way to do this is to use the Piggybanking technique which uses different bank accounts to control your cash flow (if you’re in severe debt, also see the the Problem Debts article).
Work out your priorities
If you haven’t got enough income to pay for everything you want to, then you’ve got to work out what’s most important to you.
First should come all necessary bills, rent, mortgage, food and clothing, but after that there’s wriggle-room for making your own spending decisions.
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