3 Tips for Better Finances in 2019

Taking charge of money can be surprisingly tough. It’s easier though when you have a quick system for tracking where money comes from and where it’s going. If you’ve never really considered bookkeeping, especially if you’re not running a business, maybe it’s time to think again.

While it’s vital for business owners, bookkeeping is also a powerful tool to optimise household expenses. A super simple system can show where you can save money, leaving more to spend on the good things in life.

A Really Simple Bookkeeping Method

If you like jotting things down on paper, use a notebook. If computers are your thing, use Excel. If you like online software, sign up for an accounting subscription. For those using books or computers, make five columns on a new page or worksheet:

Date – when the transaction happened.

Item – what you bought or sold.

Cost – itemise down to the last penny rather than rounding out.

Income – sales if you’re in business, wages or investment returns if you’re not. If you regularly receive income from investments, you might want to ask an accountant how you could save on taxes or otherwise manage your income better.

Balance – add or subtract the amount in the cost column from a running total. Take the opening balance from your current bank statement when you first set up your system. Don’t forget to include direct debits for bills or subscriptions.

Fill in these columns every day if you have lots going on, or weekly if that’s more convenient.

Make Your Receipts Work for You

Always get a receipt, and ask for one if it’s not offered. Sometimes for small purchases, shops assume you won’t bother with one but when you’re tracking income and expense you need to know what your money is doing and it’s easy to forget the small things.

One tip to make cross referencing receipts easier is to figure out your own numbering system for them. Write each number on the receipt, then use that number in your accounts. Keep all the receipts in a new folder for each month so you can quickly locate any you want to check on. If you’re not in business you don’t have to keep them forever, but it’s handy to have a record going back several months or a year. It also means you’re less likely to lose receipts for anything you might want to exchange or return under guarantee or warranty.

Put the Numbers to Work

The magic in the numbers comes after a couple of months when you have a bit of a track record built up. Looking back over your bookkeeping entries, you can see exactly where you’re making and spending the most, and if your expenses are overtaking your income. In this case, you can use the numbers to find areas where you can make savings. Often we don’t realise just how much we’re spending on things like take-away meals or casual coffee dates with friends.

If you’re trying to save for something special, bookkeeping can help here too. Because you’ll always have your current bank balance in your head (having filled in your columns recently) you’ll know what money is left over at the end of the month. Instead of splurging or letting it lie, transfer that amount into a savings account. Even just a few pounds each month adds up over a year.

Better finances rely on more than a better income. Managing what you already have can have a positive effect on your bank balance, and give you peace of mind too.


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