Nadia Malik is an income management advisor at Bromford

If you are anything like me, entering a new calendar year is always the perfect time to assess my spending habits and decide where I might be able to make savings.

The trouble is, even thinking about finances can be a daunting prospect, let alone creating an actual budget. Luckily after more than 10 years’ experience in this field, I like to think I know a thing or two about managing my money effectively.

So, as part of our ongoing Money Matters campaign, here are five easy things you can do to start a budget right away…

1. Gather your paperwork
It might sound obvious but you’d be surprised at how many people miss this first step – and you can’t budget if you haven’t got all of your financial paperwork to hand. The more information you can dig up, the more accurate your budget will be so look for credit card bills, utility bills, receipts, payslips, loan statements, car insurance, and anything else relating to your income and expenses. Most of this will be online but remember some of it may still be physical paperwork.

2. Get the calculator out
This is the therapeutic part! You now need to calculate all of your income (what you have coming in) and your expenditure (what you spend) and we have a simple budget calculator to help you do it. In terms of your income, make sure you track everything that is coming in (wages, benefits, maintenance payments etc) as well as checking you’re receiving all the money you’re entitled to. An easy way to do this is looking at bank statements, and looking at your last three months can be a great way of tracking expenditure.

3. Review the totals
Okay, so this is the bit some people dread but I promise you it isn’t that bad. Are you spending more money than is coming in? Or is there surplus leftover? Ideally, your income should always exceed your expenditure – and if it doesn’t, it just means starting a budget today and following these steps can help you get back on track in no time. Budgeting can both help keep you out of debt but also help you work your way out of debt.

4. Circle priority expenses
The next step is to go down your expenditure list and circle or highlight any that are essential – for example, your rent, council tax, utility bills, and any priority debts. These are the things you know you need to pay first and can’t be forgotten about. If you’re doing this list on the computer, you could move all of the highlighted/circled items to the top of that list to make it clearer.

5. Review other expenses
This last step can often be surprising! Look at the items on your expenditure list that you didn’t highlight, is there anything you don’t need any more or have stopped using?

Are there any better deals on things like TV and internet packages? Something like Netflix can have different packages, you could save up to £8 just by stripping some features you might not even use! Study your direct debits and recurring payments, too. Are you paying any subscriptions that you don’t use any more? If so, cancel them! If you are paying off a lot of debt, it may be worth speaking to StepChange or Citizens Advice to see if they can help reduce this for you.

Finally, remember to keep reviewing your budget on a regular basis because income and expenditure can vary month to month. Return to it regularly, and soon you’ll be a budgeting whizz!

If you want any further advice, please head over to the My Money area of our website for lots of helpful tips on a range of topics.