by Summer Waters

Created on: June 18, 2008

It can be all too easy to put off managing your finances until later, maybe because you get overwhelmed by all the number-crunching, you have debts you don't want to face or you simply don't have the time. The latter was the case for me, but the little man in my head just kept on nagging me to get things under control, and it took a while, but eventually I did. And it feels great.

If, like me, your little man has been nagging a bit more than usual, then this could be the time to take the plunge and sort things out. Here's how I did it...

1. Assess the situation. A good way to start is with a spreadsheet, but you can do all this on pen and paper too. Note down all of your available money, where it is stored and the interest rate it is earning. Note down any debts you have, who with, whether or not you are paying interest on those debts and if so, how much. You also need to note down your monthly earnings and all monthly bills or outgoings from your account, and divide the cost of any annual bills such as tv licence by 12 to get the monthly cost.

2. If you have debts, the next step, before anything else, is to cheapen it if you can. Have a look if you can shift debt somewhere cheaper...if you are paying interest on a credit card, find the best balance transfer deal and transfer it (BUT DO NOT SPEND ON THIS CARD UNLESS YOU HAVE THE SAME LENGTH OF TIME INTEREST FREE FOR PURCHASES AS BALANCE TRANSFERS - if you do, you will find that the credit card company will allocate your payments to the interest free debt first, so that even if you spend only 5, it will sit there costing you whopping rates of interest and the credit card company will not consider the 5 paid off until you have paid off the whole amount of the interest free balance transfer first). Have a look for better overdraft or loan rates. Be shrewd and shop around.

3. Now the debt's in the best shape it can be, you can put your efforts into getting things going in the right direction. Subtract your monthly bills from your monthly wage. The money left is what you have for food, petrol and any luxuries or any other shopping. If you have less than what you spend, you need to cut down before your debt increases. First, look for things that won't affect you that you can make cheaper, like switching gas and electricity supplier. Then you need to start looking at cutbacks or ways to earn more. There are lots of money saving websites that can help you with this. If you still can't even out the figure, you may need

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