Money worries can be one of the most stressful things in our lives. However, too often we’re scared that we can’t take back control of our finances and make a difference to our current financial reality. This prevents us from facing our money issues. We try to push it to the back of our brains but it always lingers. We try to fool ourselves that it will improve on its own but really it drains our energy and stresses us out. Living in denial feels far easier and safer than taking responsibility for our bank account. However, cutting costs is a lot easier than you may think, and you can gain back control of your finances.

During university, I was spending like crazy without thinking. I had student loans, bursaries, and an overdraft to fall back on. However, your overspending will always catch up with you. I ended up constantly in my overdraft and paying bank fees every month and this is a horrible cycle to end up in. Luckily, I decided to stop avoiding my bank account and start doing something about it.

Taking time to accept where you are currently in your finances and taking ownership of your money is the first step towards financial freedom. The next step is to look at your bank account and see where your money is going on a daily, weekly, and monthly basis. Therefore, simply spending an hour out of your life, going through your finances will spare you a lot of hours of stressing and sleepless nights.

A Quick Guide to Cutting Costs

Here’s how to work out your outgoings and take back control of your finances by cutting costs…

1. Grab yourself a pen and a piece of paper and make a list of all of your monthly direct debits, bills, and anything else you have to pay each month.
2. Then go through your bank account and see how much money you spend on food, eating out, drinking, travel, takeaways, leisure activities (playing pool, bowling, going to the cinema, etc). Shopping, petrol, gym memberships, lottery tickets, Netflix, and anything and everything else you spend your money on.
3. The next step is to see areas where you can instantly cut back on your spending. You may not go to the gym anymore and could cancel your membership. (Say your membership is £20 a month, that might not seem like much but that’s £240 a year that could be in your bank account). You may not use your Netflix account anymore. You might not need that extra iCloud storage that’s billed monthly. Or, read that monthly subscription magazine you keep forgetting to cancel. You’ll be surprised how many things you pay for which you forget over time.
4. Then look at the other areas that you’re overspending in. Everyone has something that they love to over-indulge their spending on. It could be clothes, bags, drinking, going out for meals, daily coffee from Starbucks, makeup, or beauty treatments. Cutting back on these things even a little will have a massive effect on your bank balance. Finding cheaper alternatives or cutting back will help you to start cutting costs. You could buy a coffee every other morning, or, cook a meal at home an extra night of the week. Similarly, you could limit your takeaways to every other week, or have a drink-free weekend once in a while. These small changes will all add up over time and save you lots of money in the long-run.
5. Work out how much money a week you will save by implementing some of these strategies. Then set up a direct debit into your savings account with how much you’ll be saving. Or, you could simply set up an amount like £20 that you wouldn’t think twice about spending on something else. You’ll be amazed at how quickly your savings account will grow.

Challenge yourself to have a takeaway once every other week and put the money you would usually spend into a savings account. If you do this with other areas of your spending you will see your savings begin to increase massively over time, without affecting your usual spending habits too much.

“Every little bit counts, so rather than looking for one big way to save a ton of money, save in lots of small ways and set yourself up for success.”– Unknown

Summary

Nobody wants to be constantly stressed and worrying about their finances. Work out your outgoings, and see where you can cut back on your spending. This will enable you to take back control of your finances, and will give you peace of mind. Cutting costs will help you to see areas in your life where you can cut back on your spending. There are always old subscriptions/memberships that you can cancel, which you have forgotten about. Or, other areas of your spending which you may have overlooked.

They all add up and cutting costs will help to give you financial freedom in the future. It will relieve stress and anxiety around your current financial state. Therefore, you will be able to see exactly where your money is going, which will help you to save in the future.

Simply cutting back a little on eating out, takeaways, coffee, shopping, and other leisure activities won’t stop you from enjoying your life. However, it will make you less stressed about money and make you less stressed. So, when you do go out and enjoy yourself you won’t be feeling stressed or guilty in the back of your head.

“You’ve got to tell your money what to do or it will leave.”– Dave Ramsey

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