In the current climate, many people find themselves with less, or even no, disposable income. Our energy bills are increasing, fuel prices have soared, groceries and other goods have risen and we face regular interest rate rises. But what can we do to ensure that we stay on top of our finances and ensure that we don’t end up with a negative balance? We take a look at some top tips for a financial makeover.
Start with a budget sheet
If you know your way around a spreadsheet, this is a great way to write a financial budget plan. Simply start two columns – one for outgoings and one for income. Make sure you go through your bank accounts and make a note of absolutely everything that goes out and how much the monthly payment is. Then put your income, including child benefit and anything else that you get in the next column. Hopefully the second column is greater than the first. Prioritise the sheet with the most important bills at the top.
Next it is time to start analysing what is going out and how you can reduce this. Go through the sheet line by line and see where you could make savings.
Mortgage
Perhaps the biggest monthly outgoing, unless you have children that go to private nursery, is our mortgage. Unless you managed to get in early and fix for a five year period, you may find yourself looking at mortgage payment increases of a few hundred pounds. The first thing to do is review your mortgage, make sure you are on the best deal and see if there are any savings you can make before further interest rate increases.
You can also look into payment holidays, lengthening the term of your mortgage and switching to interest only however, remember that some of these steps will affect your credit score and cost you more in the long term.
Childcare
Interestingly, we read an article recently that suggested that a thinktank was recommending a four day week to increase productivity and save people money. This would save families money on childcare and commuting costs. Could you reduce your childcare by a day? Would negotiating a four day week be feasible or would it cost too much? How could you restructure your working week to reduce childcare costs? This is not going to be feasible for some, but it may be an option if childcare costs are swallowing up a large chunk of your income.
Energy bills
Have you had a look at the energy tariff you are on? Is there a better one available? It is worth contacting your energy company or even looking at comparison sites to see if you can save money, even just a few pounds can make a big difference.
When it comes to saving money on your electricity bills, start to consider your usage:
- Turn off appliances on standby
- Shorten the wash cycle – do you need to do so many washing cycles?
- Does the dishwasher really need to go on? Could you wash up by hand?
- Use the washing line rather than the tumble drier where possible
- Turn lights off when you leave a room
- Don’t turn the heating on – pop on a jumper or an extra blanket
These small changes can soon add up and you could see your energy usage declining – therefore your bills will too. If you have children, you are going to need to educate them to turn off chargers, lights etc.
Insurance costs
Pet insurance, car insurance, house insurance, life insurance…. The list goes on. While these are often necessary, it doesn’t mean you have to pay the most expensive prices. An overview of the insurances you have, the cover they provide and if there are cheaper alternatives, could save you money and give you better protection.
Phone bill
Are you on the best deal? Could you be saving money by reducing your plan? If you are on a contract, it is worth finding out when this expires and seeing if you can get a better deal. Do you really need the latest iPhone or could you make the one you have last through your next contract and get a SIM only plan?
TV and broadband
If you were to call up Sky or any of the other broadband and TV providers, you would probably be able to get negotiate a better deal. If you are in a new contract then you probably won’t have much choice but if you are coming to the end of a contract, or are indeed out of your contract period, you could get a better deal.
Subscriptions
When was the last time you went through your bank account and looked at the subscriptions you have going out. Some are £5 a month, some £10, some even more. Here’s a list of some of the popular subscriptions which could save you a significant sum if you cancelled the ones you don’t really need
- Netflix (OK so you may need this one)
- Amazon Prime – do you use it enough?
- Disney Plus
- Spotify – the family deal costs £16.99 a month!!!
- Check your phone – what apple or Android subscriptions do you have?
- Insurance on various devices that you no longer need
- Dropbox or other cloud storage
You may be surprised at just how many subscriptions you have that you didn’t even notice going out of your account.
Fuel
There are all sorts of ways in which you can save fuel which include making sure your boot is empty, minimising your use of air con and only taking the car when you really need to. If you can car share for the school run or perhaps organise a rota, you can start to cut down on your fuel consumption. Also make sure you know the cheapest places to fill up. The supermarket is generally the cheapest.
Debts
If you have credit cards or other debts, it is worth trying to get rid of these ASAP. Using savings to get rid of them is a good idea but leave a buffer for emergencies. The amount of interest you will save yourself will be staggering. If you can consolidate into a low interest loan, this is also another option. If you find yourself really struggling then help is out there. Don’t struggle in silence.
If you require help with your finances – especially your mortgage, insurance or debt issues, we are here to help. Simply give us a call on 01934 756717 and we will be happy to offer our advice and help you to find a solution that suits you.