Money is one of the biggest causes of stress for many people. And with people in the UK owing £63.4 million more in 2022 than they did in 2021, stress levels are only on the rise.

Most of us wish we could save more money while still living an enjoyable life, but for lots of people, that can seem like an impossibility. It could be that your outgoings are more than what you’ve got coming in. Or you have considerable expenses coming up that you haven’t had enough time to budget for. Or maybe an unexpected event has left you out of pocket.

Whatever the reason behind your financial struggles, it can feel like you’re in a hopeless situation. But don’t despair just yet.

In this article, we’ll give you some tips on how you can improve your financial situation. All it takes is some careful planning, discipline and setting some financial goals and you’ll have a firm hold of your personal finances in no time.

How can I improve my finances?

You can improve your finances by going through your bank statements to see where you can cut back, reducing your outgoings, increasing your income, drawing up a budget and haggling down your insurance policies.

You could also try shopping around for purchases to save money, paying off any outstanding debts, opening a savings account, investing your money and saving for your retirement.

Continue reading to find out more about these top tips.

Top 10 tips for improving your finances

Tip 1: Go through your bank statements

Many of us don’t even look at our monthly bank statements before filing them away, but it’s worth going through them to ensure you’re not paying for things you don’t want or need.

You may find that you’ve forgotten to cancel any unwanted subscriptions and unused memberships to gyms and other clubs or classes you no longer attend.

Going through your bank statement is also a good way to track your spending, learn where your money goes and see where you might be able to cut back.

Tip 2: Reduce your outgoings

Just because you’re spending less, it doesn’t mean you can’t still have fun. If you put in a little extra thought, you can save money without sacrificing your social life.

Rather than going out for dinner with friends, consider inviting them around to your house and cooking for them instead. If you do want to go out, ask a friend or family member to babysit rather than paying a sitter. You could even start a babysitting club with other parents and take it in turns to look after the little ones.

Tip 3: Increase your income

This doesn’t necessarily mean getting a new job. There are plenty of inventive and lucrative ways to make more money without making a career change.

The easiest way to increase your income is to sell your unwanted items on websites like eBay and Gumtree or at car boot sales. Or, if you’re creative, you could consider starting a side business where you make and sell your creations in the evenings or at weekends. Etsy and Not On the High Street are great places to sell handmade items like this.

Tip 4: Draw up a budget

Once you’ve taken a close look at your bank account and worked out some ways to reduce your spending and increase your income, it’s time to draw up a monthly budget.

Write down all of your costs and expenses and deduct them from your income to work out what you have left over to spend on entertainment and luxuries. Remember to include rent, utility bills, transportation, food, toiletries, subscription services and insurance.

Once you’ve drawn up your budget, it’s important that you stick to it. One of the best ways to ensure you’re not spending over your budget is to transfer your spending money onto a prepaid card. That way, you’ll only be able to spend up to the amount you’ve loaded onto it — and no more.

Tip 5: Haggle down your insurance policies

With so much to do and so little time to do it in, you’d be forgiven for simply renewing your insurance policies — which often means losing your new customer benefits — instead of shopping around for better deals.

But if you can set aside some time to do this, you could save yourself hundreds of pounds. Even just making a quick call to your current provider can pay off, as in many cases, they would rather make you a better offer than lose a valued customer.

Don’t forget to also negotiate with your mobile phone provider at the end of your term and shop around for your utilities, as well as your car, home, health and life insurance policies.

Tip 6: Shop around

It’s not just utilities and insurance you should shop around for. If you really want to take better control of your finances, you should shop around for everything.

We’ve all heard about the adrenaline rush from shopping, but some therapists believe you can get “high” from bagging a bargain too.

This has been made much easier by the internet, which hosts thousands of retailers who can provide exactly what you want at extremely competitive prices.

Tip 7: Pay off your debts sooner

We know this is easier said than done, but if you can budget in some extra money to help clear your debts, you’ll be in a healthier financial position sooner rather than later.

If you’ve had outstanding credit card debt for more than 18 months, it’s likely your introductory low-interest rate has expired, so if you can’t afford to pay the balance off in the near future, consider transferring it to another provider who can offer you a better rate.

Tip 8: Open a savings account

It’s important to pay off any debts before you start saving, as the interest you pay on your debts is likely to be higher than the interest you earn on savings.

Once your debts are cleared, set aside a regular amount each month to save. You might find it helpful to set up a direct debit to leave your account on payday, so you don’t feel like you’re missing the money.

Also, some banks give you the option to transfer your spare change into a savings account. It might not feel like much at the time, but you’ll be surprised at how quickly it adds up.

There are plenty of savings accounts to choose from and interest rates vary, so remember to consider this when making your decision.

Tip 9: Invest your money

While savings accounts are a good place to start, interest rates are currently pretty low. So if you have enough money left over at the end of the month, you might want to consider investing.

Just remember that with investments you risk losing your money if stocks fall and you need to be prepared to invest for the longer term if you want to make a decent return.

Tip 10: Save for your retirement

All employers are legally required to offer a workplace pension, which you, your employer and the government pay into. You are able to opt-out of this if you wish to, but it’s a good idea to start contributing if you can afford to do so.

If you’re self-employed you need to think about a pension too, there are a range of retirement plans that are worth considering.

Retirement may seem like a world away, but if you start saving for the future now, you’ll be in a more comfortable position when the time comes to give up work.