First check that you have included everything you spend money on and that you have been realistic about the amounts you need for variable items like clothing, travel and food. Make sure you have included items like vets bills, lottery tickets, cigarettes and alcohol. If there is still money left over, think about some of the following options.

Make regular savings
Remember, you may need to use some of your savings at short notice so beware of tying up all your money in long-term investments. Always keep some money in a 'rainy day' account where you can withdraw it when you need it. We look at savings and investments in more detail later.

Replace old and worn out household equipment or furniture
Look around your home and see if anything is worn out or needs replacing. By replacing items before they break down, you not only avoid a crisis but can save money too. You can get a better deal if you have time to shop around for bargains and offers than if you 'panic buy'.

Pay off outstanding credit accounts more quickly
If you have a credit card or loan, where interest is added monthly, paying it off more quickly will save you money in the long run (although you may have to pay a settlement fee). If you have borrowed a fixed sum, and the credit agreement is regulated by the Consumer Credit Act, the law says that you are entitled to get some interest refunded if you pay off the agreement early (for example where you pay off a three-year loan after two years). See the Finance and Leasing Association leaflet 'Repaying your Loan Early' for more information.

Pay off or reduce your mortgage balance
You will usually save more in the long run by using your money to pay off your mortgage, rather than investing it elsewhere. This is because the amount of interest you pay on your mortgage is greater than the amount of money you can expect to make from most financial investments. But it is wise to check this out before you go ahead. Watch out for any early payment charges, also called 'redemption penalties', that your lender may levy. Check if you have other debts charging higher interest than your mortgage and clear them first. You should also bear in mind that if you only have a small lump sum it might be wiser to keep it in a 'rainy day' account. If you use it all to repay your mortgage, you will not have any cash to draw on in an emergency.