Spring clean your finances by setting budgets

Spring clean your finances by setting budgets

For me, budgeting is a life skill and we should be able to acquire this skill from school, from family and from organisations such as the Money Advice Service, which offers free and impartial advice. There are many budget planning tools online too, including through StepChange Debt Charity and the Money Advice Service.

In order to budget effectively, you’ll need to collect your bank statements and any other way you pay out money. There are lots of demands for our income, some essential and some that could possibly be trimmed.

Questions to ask

  • Can I justify all my expenses?

  • Are there things I’m not getting value from, or that I no longer use?

  • Are there ways of getting things at a reduced rate?

There are many ways of getting things through a benefit/perk scheme at work or through your local council, for example if you live with a disabled person (with a physical or mental disability), you may be applicable for a reduction in council tax. You can make an online enquiry to save you phone wait time.

Stop and assess

Many of us are paying out for things that we no longer use because we don’t stop to assess. How often do we ask ourselves, “Can I afford it?” before making a purchase? If the answer is “no”, then it’s better step away from the “Pay Now” button. A recent, more common scenario is of “Buy Now, Pay Later”. These are debts you are incurring; debts that if you don’t pay on time, impact on other areas of your financial standing.

Cheaper alternatives

There can be a tendency to buy the branded products, often swayed by advertising. Trying cheaper alternatives would save you money. For example, Boots do hair conditioners for 75p, including Mango and Papaya, or Pomegranate and Raspberry. If you use a Boots Advantage card, you can collect points that equate to a 4% savings - that’s on top of your cashback if you’re buy online.

For couples

You need to decide if you’re doing a budget just for yourself or whether it’s shared budget. You can do it weekly or monthly, depending on how you are paid. If you’re not paid a set figure, then average out your earnings for six or 12 months. In these uncertain times, which have seen many people lose their jobs, it may seem like a disheartening exercise. However, it is better to know where you are and to ask for help earlier rather than later.

We don’t tend to talk to our partners about money. You should be on the same page as the person you are sharing life with. In terms of finances, are you working towards the same things? Does he want a caravan and you want a luxury holiday? This could be a process which allows you to speak to your partner about money. Approach it as a way of seeing if there are any savings to be made. You could jointly agree to stop buying something or you may choose an alternative that suits you better now. For example instead of getting takeaways, you make decide to buy a box/kit to cook together at home.

My top tips

  • One method of practical budgeting is to create separate accounts to set aside money for the funding essentials, something you’re saving for. It’s only when we list all of our income and outgoings that we get an idea of what is left for spending or saving.

  • Once the budget is done, the hard part is sticking to it. So strengthen your resolve and feel great for not giving in, knowing that you can buy yourself or a loved one a gift that has more significance.

  • If you find yourself in trouble, you are not alone. StepChange can be contacted on 0800 138 1111 can help you to work out a plan to move forward. One of the first things they will get you to do is to look at all your income and expenses…yes, a budget.

On a lighter note, if there are teenagers who you think would benefit from this life skill, then Barclays Life Skills is an excellent resource. I liked the money personality quiz which gives you an appraisal of where you could improve in relation to money matters.

Saroj Joshi is a money saving expert. In this regular iMoney Guru series for ‘iGlobal’, the Derbyshire-based adviser shares her wealth of experience in investing, saving, and the property market of providing support to the local Indian community with her handy tips.

*For specific queries or money saving tips, you can reach iMoney Guru at info@iglobalnews.com

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