How much money can you save?

Make money by thinking and accounting for your cash flow

How much money can you save? A good question, but one you can answer only after giving your finances an overhaul.

According to moneysupermarket.com, the average family could save £5,000 simply by shopping around for the best financial deals. In addition, you could save more by spending wisely on day-to-day items.

However, to realise this saving involves knowing where you are with your finances, being able to implement a budget and balance your account. You need to know how much money is coming in and what is going out on expenses and, liabilities (credit cards, store cards and so on).

Your first task as you go about saving yourself £5000 is to collect all most recent bills and statements. The next thing is to grab a pen and note pad, or open the spreadsheet programme on your pc, or even better, go online to sites like this one from the BBC.

A quick look at your income statement and cash flow should show you how your numbers stack up. These numbers reveal the facts behind the state of your financial well-being, while the facts tell a story on what you have been up to with your money.

Now that you have sorted out your budget, and are aware of your cash flow, you can go back online to compare the financial deals available so you can start saving. There are many websites dedicated to finding the best deals, whether they are for savings accounts, mortgages, credit cards, telephone bills or car insurance. You can start by checking out moneysupermarket.com.

Finally, pick up the phone to negotiate a better deal with your bank(s). Start by telling them you plan to leave because you can get a better deal elsewhere, you will be able to negotiate better that way. I remember lowering my mortgage using this strategy two years ago. Two good reasons for speaking to your bank(s) first is the time you save, and second, the paperwork avoided.

With all things in life, you have to start with where you are. You cannot increase the money in your life if you can’t account for where your money flows.