Simple Accounting Tips to Make Your Money Go Further | Become An Accounting Expert With These Simple Steps | A Guest Post.

Friday, 19 October 2018

Unless you’re running a business, it’s easy to see accounting as something you don’t need. This is especially true if your finances are relatively simple, with one or two household incomes, a bank account and maybe a savings account or two.

Simple bookkeeping, though, is useful for everyone. It can reveal amazing things about money and how you spend it, and with that information, you can make some equally amazing changes for the better.

Log Your Expenses

A simple system is the first thing you need. A notebook, a spreadsheet or an online accounting subscription will get you going. You don’t need anything fancy.

At its heart, accounting is tracking income and expense. So, create just five columns on a page and head each one like this:

  • Date - when you spent the money
  • Item - what you bought. Include all your direct debits or standing orders.
  • Cost - How much each item or direct debit etc costs.
  • Income - all amounts paid into your bank account
  • Balance - At the top of the column, write your current bank balance.

Give each entry its own line, even if the transactions happen on the same day. That way, everything is nicely itemised and you can immediately see whether to add or subtract amounts from your balance column.

This simple system will start you off and help you get into the habit of logging all your income and expense. If it’s not enough, such as when you need to track other things like investments or additional income streams, ask a bookkeeper or accountant to help you sort out a suitable system. Effective accounting can help reduce your tax bill, and an accountant will make sure you’re claiming all your allowances.

Save Receipts

Don’t rely on memory when you’re filling in your columns. Save all your receipts until you get home, then refer back to them and make accurate entries. Few of us can remember costs down to the penny so you need the paper record for accuracy. If you tend to round up or down for convenience, you’ll end up with misleading figures that undo all the effort you’ve put into your bookkeeping.

Unless you need to store receipts for business purposes, you can bin them once you’ve logged the transaction. As a bonus, you’ll no longer be lugging around half a forest of paper in your handbag or purse!

Control Money with Accounting

After a couple of months of keeping records, you’ll see a pattern emerging for how you manage your money. You can see at a glance how much you spend on groceries, how much your mobile is costing, or how often you order a takeaway.

Armed with this information, it’s easier to make a few changes so you can divert more into savings. All too often we hear that saving money means cutting out the nicest things, like coffee with friends or treating the kids. The advice isn’t wrong, but sometimes there are ways to spend less on necessities and have the best of both worlds. It’s possible to enjoy the odd splurge and still save money.

For instance, you could examine your food shopping bill. Top-up shopping through the week can easily double your grocery bill, as we all know how hard it is to go in for a loaf and actually come out with just a loaf. Try making a shopping list and buying everything you’ll need for the week at once. You could also try a different supermarket and compare prices of everyday items.

By looking back over your accounts for a few months, you’ll see exactly where your money goes. By taking the guesswork out of spending and saving, a simple accounting method puts you in control so you can make your money go further.

Love, Sarah

*Guest post kindly sponsored by Brannt Accounting.

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