Managing Your Money

The cost of living is rising which means we all need to manage our spending more carefully.
Businesses and people are facing increasing costs so now is the time to get clever about our money.
Money is the biggest cause of stress for most of us, managing our money better can lead to better wellbeing.

What does the budget mean for you?

The spring budget has announced some changes to be aware of.

  • Fuel Cap. The price of fuel has been cut by 5p a litre for the next 12 months.
  • You will pay an extra 1.25% in National Insurance contributions.
  • Rise in gas, water and electric bills. On average energy bills will rise by £693 a year.

The Bank of England aim to keep inflation at 2%. Currently it is at 6.2% and is expected to rise to 8% by spring.
This means the costs of goods has risen on average by 6.2%, this includes your food shop to the cost of your holiday.

Take control of your spending

Be smart with subscriptions. Check your monthly subscriptions. Is there any you don’t need or use?

Switch suppliers. As bills are rising it’s important to see if you can get a better deal elsewhere.

Unsubscribe from emails. When you get texts and emails with ‘deals’, you may be tempted to make unnecessary purchases.

Save for the big purchases. By putting money aside each week you can ensure you’re not caught out when emergencies happen.

Limit credit card usage and borrowing money. Don’t be tempted to use credit cards or loans. It causes big problems when you need to pay them off.

How to work out your budget

  • Work out your income. Look at your income on an average of 3 months, as it may vary.
  • Divide your spending into needs v wants. Needs -mortgage, debt repayments, food. Wants – meals out, new clothes, going out. Ensure your cover your needs first.
  • 50-30-20 method. This suggests 50% on your living expenses, 30% on ‘wants’ and 20% for savings or paying off extra debts. This rule may not work for everyone. You can try a budget calculator.
  • Be realistic. Don’t set yourself goals you wont be able to achieve.
  • To make sure you will stick to your budget, factor in money to do things you enjoy.

Is debt becoming overwhelming?

Knowledge puts you back in control of your debt.
Get all your paperwork together and look at everything you may have been avoiding. It may feel overwhelming but it is the best way to get in control.

  • Write down all your debts. Now you have everything together, write out everything you owe.
  • Once you know your budget, you can work out what you can afford to repay.
  • Prioritise your debts by consequence of not paying. For example mortgage arrears can lead to your home being repossessed.
  • Consolidate debts where possible for services with the lowest interest terms possible.

Useful Apps

Budget Calculator

Clarity Money

National Debtline

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