Time to Budget

By in
483
Time to Budget

With some free time on my hands, and certainly as we are sailing through uncertain waters, as a family we have had to look at our outgoings.  What can we scale back on?  What direct debits can we cancel in the short term?  What can we ditch…. realistically for good?

 

First Things First

Check out your bank statements and go through all your outgoings.  If you haven’t done this in a while, you might be questioning some of the items.  But this is a good thing.  Maybe you are still paying for subscriptions you thought had automatically come to an end, only to find they have renewed.  Some other places to consider checking:

  • App Store
  • Amazon for things such as Kindle Unlimited
  • Online storage accounts you may no longer be using
  • Credit cards and PayPal – it’s amazing how many subscriptions can hide inside these

Budgeting  

Making sure your outgoings aren’t outweighing your income can be tricky, especially if you don’t regularly keep track on your finances.

Looking into what you spend weekly and monthly should be easy enough.  But don’t forget those annual spends, both automatic renewals and ad hoc costs. 

Going through your finances can be a time-consuming process but will be worth your time even if it’s just for peace of mind.  Do this by jotting down expenditure and income in a spreadsheet.  Or for an in-depth check, I’ve come across a Budget Planner by Money Saving Expert, Martin Lewis, available in a downloadable PDF printout or you can open in a spreadsheet

Categorise

Categorise your spending into essential and non-essential items.  This might be an obvious statement to make, but one person’s essential item may be frivolous to someone else.  At the end of the day, we need to be living within our means, and I suspect peoples means are tighter than normal right now.  Shaving off a few quid here and there means a few more quid in your pocket.

Take shopping as an example, if you’re currently spending £150 a week, set that as your budget maximum.  But where can you draw things in and make savings within this budget?  Can you buy cheaper alternatives?  What about where you shop? 

Are you being a bit snobby with your brands?  I am guilty of this.  I have realised that a 30p can of beans from Lidl is no worse than a 75p can of beans from Tesco.

Can supporting a local business save you money on your fruit and veg?  This is so easy for us as a family.  We live a stone’s throw away from a Fruit and Veg wholesaler.  Why pay £1.50 for five limes in a supermarket if I can get 10 for £1?  

This is just one example of course, but you get my drift.  For anyone local to me in Carmarthen, I would recommend Chris Thomas & Sons- Abergwili Road.  Find them on Facebook or  Instagram.

 

Consolidate your loans

Consolidating loans into cheaper alternatives is a great way of saving.   Combining your credit card loans and in-store credit agreements into a cheaper bank loan might be a simple way of reducing a monthly outgoing.  Something for you to look into on an individual basis.

I like using this link to calculate how much interest would be payable over the length of the term of the loan(s).  It really highlights how much extra you will be paying these companies.  So, look into consolidating into one cheaper bank loan, you could make big savings.

 

Making overpayments

For many of us, now might not be the right time to talk about making overpayments on larger loans such as your mortgage, car repayments etc.  But I thought I would quickly mention this, as we have saved thousands over the years by tightening our belts for the greater good.  

I personally hate owing money.  When I calculated how much we would be repaying in interest alone for certain purchases, we made it our mission to make as many overpayments as possible, little by little.  Of course, this came by making sacrifices in other areas, but it was a choice we made and stuck to.  Something to think about in the long term maybe.  You may need to consider early repayment penalties / clauses.  Again, something to look at individually.

 

Contracts

Ugh, contracts such as mobile phones and broadband.  Something the majority of us have and actually, probably, couldn’t live without?  Is that a bold statement?  Maybe, but true in a lot of cases I would bet.   Why do many of us continue to pay for the same mobile phone once out of contract?  Your monthly fee is still paying partially for the phone!  Is this oversight or laziness?  I’m not sure.  You could save hundreds of pounds a year switching to a SIM Only deal. I’m guilty of this behaviour as well.  Maybe not with phones, but certainly with Sky and Broadband.

Whilst going through my finances, I questioned why we were paying more for a Broadband product than the same product being advertised by the same provider?  This is beyond crazy. 

I had a similar situation with Sky and Netflix.  The point is, it’s certainly worth contacting your providers to ask the question “Am I paying too much for the services I’m receiving”.  On a human level, I would assume if your services have been reduced in price over time, your monthly fee would automatically reduce in line.  This possibly is not the case.  You may well have to physically phone your provider and ask.  Or, visit their website and look at their pricing structures. 

We have saved in excess of £15 a month for keeping exactly the same products!

Goodbye Subscriptions

Everyone’s finances and situations are different of course, but for us as a family, we have managed to save by simply cancelling subscriptions, that actually I don’t think we were fully utilising anyway.  It’s amazing how easy it is to sign up for goods and services, and it’s astounding how these are easily forgotten about.  Wave goodbye to unwanted subscriptions and see how much you could save.

Summary

I feel a lot of the information I have mentioned is probably common sense.  However, I think as a society we tend to want to stick with the same providers and products out of loyalty and easiness.  Perhaps we don’t question enough.  But times are hard.  If we can save money, now is certainly the right time to do this.  Good luck and stay safe.

Leave a reply

Your email address will not be published. Required fields are marked *