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By Halifax

Date: Friday 29 Aug 2008

It’s not always easy to keep a close eye on our spending, and, let’s face it, modern life can be an expensive business. There are seemingly ever-increasing food, fuel and utilities bills to pay, and then there are those spur-of-the-moment purchases that are forgotten, until our bank account statement drops on the doormat.

If you know that your current account might slip into the red, setting up an arranged overdraft with your bank is a quick and simple process. You can arrange your overdraft in person at your local branch, or, if it’s more convenient, you can apply online or over the telephone.

Unarranged overdrafts on current accounts can attract fees and charges. However, if you plan your spending carefully, and keep a close eye on your finances, you can avoid having to use an overdraft at all.

So what can you do to keep your finances in shipshape condition? First off, work out your personal budget and prioritise where your money should go. Essential expenses will include such things as groceries, rent or mortgage payments, home insurance payments, household bills and vehicle maintenance, and these should be accounted for before you splash out on the luxurious things in life.

Get into the habit of recording all of your financial transactions; for example keeping the receipts whenever you buy something. Making a record of any bills you pay, and keeping your withdrawal slips each time you use the hole in the wall – it'll help you keep an eye on your spending and perhaps find areas where you can tighten your belt. You may be surprised by how much you spend on things you don't really need – those cups of gourmet coffee will add up if you buy them every day.

Count everything up at the end of the week and you’ll have an accurate picture of what your spending patterns are, which in turn will then help you make decisions on how to spend your money in the future.

Think twice before whipping out the plastic to make an impulse purchase. If you had to hand over a wad of banknotes when you went to pay, you might quickly find that those 'must have' fashion items become more 'would like' or that indispensable new gadget is dispensable after all. If you're able to keep your current account in credit, make sure that your money is working for you – by keeping an eye on interest rates as you're likely to find a current account offering you that little bit extra, which might make a big difference to your finances.

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