Ad. Money is a topic that many people avoid. And while it’s important to have an understanding of your finances, it can be difficult to get started. Fortunately, there are plenty of tools that can help you take control of your money and make the best decisions for yourself.

If you bury your head in the sand about money, you could find yourself in a difficult position. It can be easy to avoid looking at the bank account number and hoping for the best, but this can lead to money stress and also the lack of ability to plan finances, budget or save.

Being stressed about money is something that most of us deal with at some point. There is no shame in having financial troubles. There are many ways to manage your money better, but these 5 tips are a good place to start.

List your monthly outgoings

Listing your monthly outgoings is the first step to facing your money problems. Be honest with yourself about what you are spending and see how much money you have surplus to your bills and living costs.

You can also look at where you can make any cuts.

See what subscriptions you have and ask yourself if you need them all. If you are paying for a Disney+ subscription but haven’t watched it in months, stop! That’s extra money that can go towards something else.

Start a sinking fund

Is your car insurance due in a few months? Time to start putting a bit away each payday until you have £400 saved up!

What about a holiday? Christmas? A weekend away with the girls?

All these things cost money and the best thing to do is start a sinking fund, which is where you have a goal of saving a set amount for something specific.

People use many methods for this. Some just keep it in a savings account, others use money envelopes where they stuff envelopes with cash.

I use the ‘Pot’ function on Monzo, where I can put money into different pots for different things and move it around when I need it.

Have an emergency fund

If you have to take some unpaid time off work or if your boiler breaks – can you cope financially?

You’re leaving yourself in a sticky position if you don’t have an emergency fund. It’s a good goal to have enough money to cover your living expenses for 6 months. But don’t let that make it feel like an unrealistic goal. We all start somewhere and putting just £10 away a month is better than nothing and will help towards any unexpected expenses.

Consolidate debts

If you have a lot of debt, it might be time to consider consolidating them into one loan.

Consolidating debts is when you take out a loan to pay off all your debts, leaving with just one left to deal with. These usually have lower interest than say, the interest you’re paying on debt from 3 different credit cards. So pay them all off at once and then repay the consolidation loan.

You may find this less overwhelming and easier to face mentally! You can use a service like this to get your loan.

Avoid using finance

It might be tempting to get that new sofa on a monthly repayment plan of only £40 a month for the next 5 years, but chances are you wil be paying SO much more back interest. Same goes with a car, many people get brand new cars on finance and get stuck in a trap of paying hundreds of pounds a month for a car they never own, then just getting a new one after two years rather than paying the remaining money off.

I bought a new car in October as I needed a bigger one for the baby (my back could not cope with the 3 door Fiesta!). I didn’t get a brand new one, I got one cost £6k and they bought my old one off me for £3k. So I only had to pay £3k for it. I know not everyone would have a few thousand to spend on car like this, but getting a bank loan to buy a cheaper car that you’ll pay off then own is still better than getting a car on fianance.

It’s always best to save money and buy things with the cash you already have.

My laptop is 4 years old now and I’ll probably need a new one within the next 18 months. MacBooks are quite expensive so I’ve already started saving money into my sinking fund. This means that when I do need a new one, I’ll have the cash for it already and don’t need to take out a loan or put it on a credit card.

Even if you can only put a small amount away each month, it’s better than nothing! It’s much better than falling into a trap with payday loans!

Have a goal

Financial goals are so important. I have a goal of saving £5k this year and overpaying our mortgage by £5k.

The long term goal is to be able to get a new house in a couple of years and have a good amount of equity to buy a new home, and money saved to either put into the deposit or for renovations.

If you are struggling with your mental health because of money related stress, please check out this resource from Mind.org for support.

Hope this tips have helped you manage your stress around money.