Given the current economic climate, everybody is trying to save money wherever they can. This does not mean that we have to stay in every night, too afraid to turn the light on, but it is surprising to see just how much money you can save by budgeting right, prioritising your bills and seeking out bargains. Wescot has put together this guide to help you save money and manage your financial position whatever that maybe. Get started by making a truthful evaluation of how much disposable income you have each month and go on from there.
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It is impossible to see where you can save money without first putting together a sound budget, marking all sources of income against all outgoings. First, determine your total income by combining all sources of monthly income, including wages, benefits and any pension income. Next, make a conservative judgement as to how much money actually goes out on food bills, utilities, rent and other necessary costs.
You should also take care to include in your budget any expenses that don’t occur monthly. For instance, you know that every year, December is going to be expensive, so add Christmas to your budget. Other irregular expenses might include veterinary bills or vehicle maintenance costs. Expenses like these can be included on a monthly budget by determining their total annual cost and dividing it by 12.
Prioritise Bill Payment
After you create your budget and determine whether you have a budget surplus (money left over at the end of the month) or a budget deficit (less money than what you need), you may need to consider which bills should be paid over others. Some monthly expenses are more important to pay on time, such as a mortgage or your rent, since failure to pay these bills may result in losing your home. Other high-priority bills include council taxes, child maintenance, gas or electricity and the telephone.
Paying high-priority bills on time can save you a lot of frustration and money as you avoid fines, garnished wages and other costly consequences.
Help with Food Shopping
Once you have set up a budget and taken into consideration all of your monthly expenditures, it is time to sit down and work out how to cut back on the essentials. Take food shopping as an example, it is certainly a necessity, but cutting back is surprisingly straightforward.
Planning beforehand what you are going to eat for the week is one of the best ways to reduce your food bill, and creating a menu can be fun too while ensuring that you don’t always eat the same meals week in, week out. Knowing precisely what ingredients you are going to need before you go into the supermarket will stop you from frivolously picking up whatever you fancy as you walk down the aisles. You can also keep an eye out for special offers and plan meals around these deals.
Shop Second Hand
Shopping smart does not limit you to the supermarket either. Perhaps one of just a few benefits of the credit crunch has been the rise in second hand outlets, from clothing to electronic goods. Just because inflation has been increasing over the past seven years hasn’t stopped refrigerators breaking or clothes unravelling. There are plenty of avenues to go down if you don’t mind picking up a ‘pre-loved’ bargain, saving money and the environment as you go.
Charity shops, vintage markets and online websites are perfect for getting your hands on essential items, most of which are of good quality and for a fraction of the price you would pay brand new.
Stay on Budget with Cash
Spending cold, hard cash is much more difficult than swiping a piece of plastic through a card reader. As part of the budgeting process, you should assign yourself your week’s disposable income in cash in order to prevent overspending. Imagine walking into a shop on the Tuesday and spending your assigned cash on a new pair of shoes. For the rest of the week, you will have to stare into an empty wallet, which would for most people, be a bigger deterrent than just seeing a digitalised number decrease the next time you check the bank.
Biting the Bullet
Budgeting is not easy to begin with; it requires having to face a few hard truths about where your money goes, but by the time the next payday rolls around, you will thank yourself. Swallowing a little pride is a small price to pay when it comes to saving money, and the above examples should demonstrate just how simple it is to make cut backs without stopping you from enjoying yourself.