If you are finding that your monthly budget is a little tight at the moment, it can be easy to accidentally overspend and leave yourself short. While this is inconvenient at the best of times, if the lack of funds in your account means that some debit payments bounce, you could incur bank changes which make the situation even worse.
Many debt spirals start with a missed payment that incurs charges, resulting in more missed payments and falling into significant arrears. If you have little room for manoeuvre with your monthly budget, you may be at risk of falling into this trap. It may therefore be worth thinking about whether you can switch to a bank account that is more suitable for your needs…
These compartmentalise your income so that they can be used for serving separate purposes. Money set aside for bills such as rent and utilities is only used for paying these debits, and cannot be impacted by your everyday spending as this is stored in a separate place. Dividing your money up in this way ensures you have all the bases covered from the start of every month, and seriously reduces the stress surrounding money management.
Along these lines many providers such as Secure Trust Bank, that offer jam jar accounts, include the service of a dedicated money manager within the nominal monthly administration fee. This provides those who do get into financial difficulty a regular point of contact at their bank and access to some expert advice when it is most needed.
Prepaid cards work in the same way that prepaid cell phones do – you have to actively load money onto the card before you can use it. Once this is done, it works in the same way as any other card – except you can’t overspend. Actively loading money onto the card is a good way of setting a spending budget and ensuring you manage to stick to it – this is important when you’re working to a tight budget.
Also, look into using mobile apps allows you to utilise your smartphone or tablet device to keep a track on all your financial commitments. You can collate data from bank accounts, credit cards, personal loans and other borrowings all in one place, making it quick and easy to find out exactly what is going on in your finances.