So we are all guilty of spending a little too much sometimes so let us scale back and try to look at how we can help our cash flow. I will do this in steps so it is simple to follow:
- A list of all your monthly bills – This includes everything including the ones you sometimes forget such as Netflix, monthly gym membership, car tax, car insurance, water bills, gas and electric, any monthly spend leaving your bank account every month.
- A list of all income hitting your account on a monthly basis so this could be wages, tax credits, other income, anything that you are bringing in. Now hopefully the income is higher then the expenditure.
- Next stage is actually creating a budget – We take the outgoings off the income and what we are left with is what we have to spend. So if we have £200 then we budget for the remainder of the month so £50 per week to spend on any luxuries. Once the £50 is spent that is it.
- We can help budgeting by looking at all our monthly things and deciding whether we are actually getting any use from them such as gym membership, are we attending the gym, Netflix – Do we watch normal TV most evenings? Could we switch our Sky bill to freeview? Could we haggle a better deal on sky? Could we change to a water meter and just have showers instead of baths to cut back? Could we look at a cheaper car for tax and insurance purposes.
- Next step – How can you improve income – Making people boost their income doing little extra jobs such as babysitting, cleaning or people per hour type sites with using their skills to make a little extra cash (Don’t forget to register as self employed if you are above the threshold) Other opportunities to make money include survey sites, cashback websites and survey and question apps on your phone, you can even do a weekly shopping scan to gain vouchers for many high street shops. You can also increase cash back using credit cards such as the asda credit card or many banks have offers to get money back if you spend in certain places. You can also get Nectar points for shopping at Ebay, Tesco points for shopping in Tesco and also advantage card points for shopping in boots so if you are doing these anyway, don’t just buy stuff to get points, but if your already doing things you may as well get the points.
- So now we have cut our bills and made some more money – The next step is for the luxuries such as holidays. We have options to save in a little pot and put money aside per month. Many holiday companies let you pay in chunks upfront to pay your holiday off if you book far in advance, Thomas Cook, National Holidays and Hoseasons to name a few so that could be a good idea, so you aren’t putting it all in credit to pay off after. Look at all your spending – Buy in advance for the seasons, Christmas gift sets are reduced on black Fridays and also after Christmas, you might be able to meal plan for your family so you can save money on your groceries. Think about your everyday expenses such as coffees and buying lunches at work, taking a salad everyday could cost you around £1 per day as you buy the ingredients in bulk when you are probably spending £5 per day this could save you £20 per week which in total adds up to around £1040 in a year. This could be quite a few Christmas presents.
- Annual expenses like car insurance, travel insurance or home and contents always go to the comparison sites and see if you can save money. Same with your mortgage when coming up for review, speak to your company and try and get a discount or better rates by shopping around.
Good Luck and happy budgeting.