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You don't have to be rich to be a master of your money. Whatever your budget, mastering your money is about keeping track of it, getting the best deals and making your money go further.

We've selected five ways that could help people on any budget to improve their finances. We'll help you master what you spend, your budget, your credit cards, and your savings - and suggest a few ways to make more money.

1. Track every penny that you spend

There are a number of ways to do this - the obvious one is to check your bank statements. Up-to-date online balances will give you a clear picture of where your finances are today. Paper statements are useful for looking at what you have spent over recent months, giving you the bigger picture.

Other ways to keep track of spending include keeping a journal, keeping your receipts and/or entering everything you spend into a spreadsheet.

The point of tracking your spending is to:

     1. See how much you really spend every week. The chances are you will be really surprised by how much you spend. Small costs can add up over the course of a few weeks or months - cash machine withdrawal fees, bottled water, cans of drink, food that ends up in the bin. If you begin to think of these expenses as wasteful, you're more likely to stop spending your money this way.

     2. Spot patterns in your spending e.g. spending more at weekends or when out with friends. Do you need to think about finding more economical hobbies for the weekend?

     3. Help you to draw up your monthly budget.

If you're spending more than your income every month, take action now and cut back on what you spend.

2. Set a budget and stick to it

Setting a budget and sticking to it is easier said than done - but there are a few tried-and-tested methods you could try.

  • Draw up a budget at the start of the month. Refer to your last month's 'penny tracking' to see where your money is going and decide on what is really important.
  • Group things together - e.g. transport, household bills, food, entertainment, clothes, childcare expenses, etc. and set a limit for each area. It's perfectly fine to take money from one area of your budget and move it to another.
  • Keep updating your budget. Make sure it changes to reflect any changes in your lifestyle / income / spending. Set aside a convenient time every week to review your budget and update it.
  • Keep money for food or bills in separate bank accounts, or separate envelopes.
  • Withdraw whatever you can afford for one week at the start of the week and only use that money.
  • Spend with cash instead of credit cards - handing over cash takes more thought than simply 'sticking it on plastic'.
  • Check your balance every day.
  • Let friends and family know that you're trying to budget / save up / repay debt so they can offer moral support.

3. Optimise your cards & accounts

You can change how you use your credit cards. If you have more than one credit card, you should consider cutting them down to one, to limit the overall amount of debt you can run up. If you see your credit card balance as a short-term loan and repay it quickly, you'll pay less interest in the long run (or even none at all if you always repay it on time).

You could switch your credit card to a reward card - some credit cards will reward you for purchases, but you should see this as an added bonus, not an incentive to spend!

Another option could be to transfer your credit card balance to a 0% balance transfer card. Just remember to take the balance transfer fee into account - and do your best to repay the balance during the interest-free period.

You could also apply for a managed bank account to help you stick to your budget. Try to avoid bank charges for bounced payments or using an overdraft - it comes out of your budget and you may need that money elsewhere.

4. Start an emergency savings fund

Even the wealthiest among us could be hit by a sudden set-back. Life can throw things at you that knock you off your financial balance. If your budget is more modest, it's particularly important to plan for these events.

Remember we said to track your money and see what kind of things it's wasted on? The good news is that once you cut back and spend less, you'll have more money for an emergency fund.

An emergency fund is for the unexpected - redundancy, broken boiler, blown gasket - anything that could throw your finances into a tail-spin. Whatever amount you can save every month will be going some way towards securing your financial future.

You can have more than one savings pot. If you decide you want a holiday fund, you can put money into that - while also keeping money in another 'pot' for emergencies.

However, the emergency pot should probably be considered a priority over a holiday fund!

5. Make more money

One way to improve your spending power is to increase your income. There are various ways to do this, including:

  • Sell things that you no longer need, through the local newspaper, car boot sales, or eBay, for example.
  • Become an internet blogger. People blog about all sorts these days and you might be able to make money from it.
  • Can you paint? Play guitar? Speak a foreign language? Are you experienced in something and able to offer tutorship? If you're talented at something, you could do some freelance work - although it's important to think about the tax implications.  
  • Work harder and go the extra mile - you may get that promotion.
  • Take on a work-from-home job.
  • Think about taking in a lodger.
  • Set up a baby-sitting rota with your friends or family to save on the cost of childcare.
  • Find out if you are entitled to any more benefits.

When you're considering ways to make extra money, you need to choose something that's realistic and achievable in your situation.


Becoming a master of money takes consistent work. You cannot expect to master your finances overnight. You have to be strict with your money, and with yourself!

To get the ball rolling, it might take some effort to start tracking your money and an hour or so to draw up a budget. Then if you check your balance regularly and review your budget every month, you should be well on the way to being a master of your money!

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