Be smart with your cash and make small changes to your lifestyle. You could make some big savings over the year just by by looking through your bank account. Have you got any old club or gym memberships, magazine subscriptions that you no longer want or use. Switching energy suppliers doesn’t take long and can save you hundreds of pounds over the year. You could also to contact your phone and broadband company and try to get a better deal. A good tip is to do a price comparison beforehand and let them know if you can get a better deal elsewhere. Good old fashioned budgeting can take time but can be worth your while. As a result of your initial hard work you should have a list of all income and fixed costs, you can then choose how to spend the rest.
Income includes wages/salary, benefits such as tax credits, income support, JSA, child benefit, housing benefit, pensions and pension credits.
Fixed expenses could include:
- Food shopping
- Car expenses – road tax, fuel, MOT, etc
- Utilities: gas, electricity, water, telephone, broadband
- Car insurance
- Breakdown cover
- House insurance
- Mobile phone
Don’t forget other items which might not be regular but are a basic cost such as:
- School uniform
- School trips
- Work clothes
- Gym membership
- Eating out
- Nights out
- Charity donations
- Lottery tickets/syndicate payments
- TV subscriptions – Sky, BT Vision, Virgin Media, Netflix, Now TV, online TV packages
These fixed expenses can often be reduced by negotiating a better deal with your provider, changing mobile tariffs, buy a cheaper handset and switching to a sim only deal. Always compare prices at renewal of insurances and utility contracts. If you have a good internet connection and don’t need hundreds of channels switch to cheaper providers like Now TV or Netflix. This could slash your monthly outgoings as there is no long term contract. Furthermore with Now TV you can add the entertainment, movies and sport as and when you need them.
The idea of a spending budget it that once the fixed household expenses are taken care of then its up to you what you spend your hard earned cash on each month. Having the budget there doesn’t have to mean you have to go without. Be smart with your cash and make small changes whilst taking control of your cash.
Coffee on the go
We all like to get a takeaway coffee or hot chocolate with the works now and then and as its only a few pounds here and there you hardly miss it. However if you add in the odd cake or panini and go at least once a week this can be really expensive over the year. Some chains like Starbucks and Cafe Nero give you a discount or extra loyalty points for bringing in your own cup. You could keep local and grab a latte from your local coffee shop or bakery, these are often much cheaper. If you are sitting in, arrange to meet friends either side of lunchtime to cut down spending on extras like hot sandwiches.
If you find that you have money left over at the end of the month, it is a great idea to put money away for a rainy day. First of all consider unexpected costs you have had in the past such as emergency car repairs or boiler breakdown. Try and put at least three months income away but to six months would be a great buffer.
Once you have your emergency fund you can look at savings. Regular savings accounts often pay higher interest but only over a set period usually 12 months. ISA are also great savings products and its a good idea to set up a direct debit each month. You can always top up this payment if you have any extra spare cash at the end of the month.