How to stay on top of your finances

Money doesn’t make you happy. But money problems can often make you unhappy. If you find yourself in financial trouble, you run the risk of not being able to pay your bills. In times of rising energy prices, spiralling petrol costs, and inflation, prevention is better than cure. These tips will help you to take a step towards a healthier financial life.

Every year, nearly 100,000 households find themselves in arrears. This situation is often more serious than just being unable to pay the bills. Research shows that people with money problems are more likely to suffer from stress, sleep poorly, and perform less well. And all this can have a negative impact on your health. To avoid getting into debt and to prevent money problems, you can follow these steps:

Get a clear picture

Get a clearer picture of how much money you earn (income) and how much you spend (outgoings). This will help you stay in control of your financial situation. You can do this by checking your bank balance every week or month. Most banks have an app that helps you keep track of this. Create an overview of your income and outgoings. Since this can vary from week to week or even from month to month, it’s a good idea to stick with it for a longer period of time.

Plan smart

You can then use this overview to anticipate when many of your bills are due in advance. To avoid problems, it is advisable to create a schedule of your regular monthly or yearly outgoings. You can use online budgeting tools or other digital tools to help you.

Save money

When you know what you are spending your money on, it is easier to spot opportunities to save. Does your lifestyle match your income? Bear this in mind when doing your shopping; for example, choose cheaper supermarket brands rather than premium brands. Even though there might only be a small difference in price for individual items, this can save you a lot of money on an annual basis. But also make sure that you keep your fixed costs (insurances, subscriptions) at a manageable level. If you are short on cash, consider switching to a cheaper mobile contract, for example. Or stick to regular television and cancel your Netflix or Videoland subscriptions. It is recommended to save 10% of your income each month.

Build a buffer

By setting aside any money you save or have left over at the end of each month, you can build up a buffer for unexpected circumstances, for example, if your washing machine breaks. This kind of thing can happen at any time, and it would be a shame if you ended up struggling to make ends meet. Have you saved up money or have you had a financial windfall (for example, you have just received your holiday allowance, a bonus, or even a pay rise)? Set that money aside so you won’t be tempted to spend it in the short term.

Build up capital

Do you have all your money matters in order and have you built up a buffer? Then see if you can get more out of your money. This is what we call ‘building up capital’. You can do this, for instance, by saving, investing, and/or investing in a house. See which option is right for you for managing your finances over the longer term. By giving it some thought, you can get more value out of your money.

Still have money problems?

Have you lost track of your income and outgoings, are you falling behind with paying your bills, or do your money worries keep you awake at night? That can happen to anyone, especially in times like these. To prevent your problems from getting any bigger, take action! Talk to someone you trust or get help from a financial expert. The AB Werkt team is also here for you. Talk to your contact person at AB Werkt to prevent serious problems from arising early on. We can help you with budget coaching, for example.