How to Budget Better
Setting a budget can help you to become more aware of your spending and critique your habits. You may notice that you’re spending money on things you don’t need, and not saving money where you can! Follow these simple tips to budget better, spend less and save more!
Understand your Incomings ⬅
Know your Outgoings ➡
Tally up all the different bills you have to pay. Don’t forget mortgage/rent, utilities, insurance, groceries, car payments, phone contracts, Internet/TV service, etc. Add them all up and make sure the money coming in is more than what’s going out… if it’s not, you’re going to need to find a way to reduce your outgoings!
Get Rid of Debt
Paying off existing debt is a priority! Pay the debts off before you save! Debts (usually) cost more than savings earn. For your wallets sake follow this simple steps to take back control over your debts. Prioritise the most expensive debts (use any savings you have to pay these off).
Check to see if you can lower any of your debts’ interest rates. Consider a balance transfer; with a balance transfer you get a new card to pay off debt, at 0% interest/a small fee – meaning that you have longer to pay off your debt without paying the added interest.
You can write off 75% of your debt with a new government scheme called Individual Voluntary Arrangement (you may qualify if your debts are over £1,700 and you have more than one debt). If you’re being contacted by a debt collector like Wescot Glasgow for example, be aware that they have guidelines that they must follow including:
- No use of aggressive practices (coercion,
or deceit for example)
- Be transparent and provide clear information that is not misleading
- Be considerate towards debtors experiencing difficulty
If you are being intimidated by debt collectors who are not abiding by these guidelines, then you have a good case for reporting them to the Office for Fair Trading.
Reduce Non-essential Outgoings
Lets be honest – we all buy things we don’t need from time to time. For the sake of your budget you need to reduce it! Here’s what most people waste their money on (separated by generations). All three put the most unnecessary cash towards dining out…
Look for cheaper or free food alternatives to reduce your wasteful spending! But how much are you spending on ongoing contacts that you don’t need such as streaming services, entertainment packages, and gym memberships?
Do you know if you are entitled to any discounts? Do you qualify for any benefits or schemes such as Motability? Getting what you are entitled to could significantly reduce your outgoings, so if you work for a company that has discounts as company benefits or you have a disability which means you might qualify for some financial help, make sure that you have checked.
It may be a good idea to keep a record of small spends and extra earnings.
If you don’t want to do this manually, Cleo could be your new best friend! Cleo is an artificial intelligence money-managing assistant that can be accessed through Facebook Messenger, text message, Amazon Alexa or Google Assistant. Therefore, you can ask it questions relevant to your account and spending habits, and receive instant feedback and advice (super helpful!).
As well as this you can set yourself a budget and Cleo will notify you when your spending is about to send you over your budget! Another perk to signing up with Cleo is the referral scheme. When you first sign up through someones link you’ll be rewarded with £2.50. After that, you’ll get your own unique link that you can share with others and if they sign up (and connect their bank account for more than 7 days) you’ll both get £2.50!
Open a Savings Account
If you’re in debt, I recommend paying off debts before looking into a savings account.
More often than not your bank will offer you a variety of savings accounts, it’s best to talk to your bank and find out which savings account will work best for you! If you like the idea of an ‘automatic savings account‘ then carry on reading. Plum is an automatic savings account that analyses your transactions & identifies your regular income, rent, bills & daily spend. Using this data & other factors like your available balance, Plum’s smart algorithm calculates an affordable amount for you to save.
Your savings are then invested at RateSetter; one of the biggest peer-to-peer lenders in the UK. Your 3% interest (on average) accrues for every day that your funds are on loan and is paid monthly as the borrower repays their loan. You always have access to your Plum savings and can withdraw at any time (always allow for 24 hours when withdrawing).
Disclaimer: investing with RateSetter, you are lending your money to a number of people, some of which may not pay back their loans, meaning that your capital may be at risk!
Increase your Income with Side Hustles
There are tons of ways that you can earn some extra money on the side, I have a full list of these over on my ‘Side Hustles Page’. Click the link below to find a side hustle that works for you! I have a range of part-time job ideas, work-from-home roles and gigs you can do in your spare time.
Reduce your Spending
I’m constantly adding new articles to my blog that should help you save more money, but for some quick inspiration I’d recommend the following articles: