If you have found yourself in debt recently then there could be several reasons for this. Some may include sudden unavoidable personal situations such as illness, redundancy or bereavement. However for a lot of people the beginnings of debt are, unfortunately, down to poor money management.

Money management is not something that is frequently taught in school and you should not be embarrassed if you find yourself feeling in over your head when it comes to understanding your finances. There is a lot to consider. Read on for a few ways in which to ensure effective money management:

Budgeting

Creating a weekly or monthly budget can be one of the simplest ways to practice good money management, but is often something that is forgotten. A budget should give you an accurate idea of your financial situation and help you to allocate your income effectively whilst prioritising to avoid debt. When designing a budget the things to think about are; how much you really have coming in (including income from work, tax credits and perhaps family members) and how much you will really need to spend each week/month (on essentials such as food and utility bills). When you have calculated the two, you will be able to see how much money you have left over or how much you will still need. Without doing this it can be too easy to spend money that you haven’t got.

Spend less

It may seem a tough order at first but cutting back on your spending is a fail safe way to ensure you do not fall into debt. Everyone wants money to spend on life’s luxuries and vices but you should stop and think about the long term implications that over spending on these things could have. The best way to start spending less is to check all your outgoing payments first in case you are paying for things you no longer need, such as unused gym memberships, and cancel them. Next start thinking about how to reduce your shopping bills by comparing prices and sticking to maximum spend limits that you set yourself. Also, don’t be afraid to make the most of money saving offers and deals, particularly make the most of on-line opportunities including printable vouchers or e-codes. Saving money where you can in order to avoid debt is sensible not stingey.