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Life costs, we all know that. So whether you’re retired and feeling the pinch or a youngster struggling to make hard-earned cash last, or anywhere in between, its time to make the most of what you’ve got.
Yes, it’s time for the B word – budget. You need to work out how to stretch the money you’ve got so you get to live the life you want.
Jot down all the money you have coming in; don’t forget child benefit if you claim that, or investment income etc.
Next, make a note of all the direct debits and standing orders you have going out of your bank account. These are likely to be your mortgage or rent, council tax, utility bills, mobile phone, gym membership, loans and credit card repayments.
Finally, work out what you tend to spend every month on everything else. These can be variable costs like food, travel and car, going out, clothes and other expenses. Try to work out what you’ve spent on these over the past few months to work out the average cost.
Now you know your income and outgoings and you have an overview of how much life costs, you can see where your money is going – and where your priorities should lie.
It’s important to prioritise certain payments and debts. Keeping a roof over your head is key. As is keeping up-to-date with council tax payments.
Ensure you make at least the minimum repayment each month on credit cards, but ideally pay the balance off or pay more than the minimum each month. The quicker you can clear the balance the better.
That latte on your way to work, that magazine you pick up, the little treats you buy yourself when you’ve had a bad day, they all add up.
Be critical about your spending. You don’t have to spoil all your fun. But now that you’ve seen just where your hard-earned money goes, you might want to think twice about frittering it away on things you can probably do without.
It’s worth asking your employer, too, about providing fair finance. Neyber enables employees to reduce borrowing costs using affordable loans through payroll (at no cost to the employer). It means an effective 5 per cent payrise to the majority of existing Neyber borrowers, saving up to 20 per cent on monthly debt repayments.
When was the last time you reviewed your utility bills? If you’ve never switched then you stand to make even greater savings. Use one of the comparison tools and see where you can get a better deal.
Having some sort of ‘rainy day’ cash set aside is essential. You never know when you might need to pay an unexpected expense; car repairs or something wider-reaching, such as losing your job.
Experts recommend that you keep three months’ salary to hand for such emergencies, but don’t panic if you haven’t made a start on it already. The trick is to start drip-feeding some money into a savings plan now. The sooner you start, the longer your money has to grow.
By Heidi Allan, financial wellbeing team, www.neyber.co.uk