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Feb 10

Budget Planning


Posted: under Budgeting.
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Budgeting

Find out how a personal budget will help you make the most of your money and avoid over-commitment. It will also help you plan for the future and negotiate with any people you owe money to.

 

Why budget?

With an accurate budget, you’ll be able to cut out unnecessary expenses and save money, or stop running up big debts. If you already have debt problems, a budget will show you how much spare cash you have. This will help when you talk to your creditors (those you owe money to), because you’ll be able to make realistic offers to pay them back over a period of time.

 

Calculating your personal budget

A budget planner has headings for different kinds of income and spending, against which you can put your own figures. You’ll find several calculators on the internet; choose the one that suits you best.

 

Outgoings

Start by working out what you spend: check recent bank statements, and bills for gas, electricity, telephone, Council Tax, water rates, insurance and similar expenses. Don’t forget to include anything you pay by standing order (for example, mortgage or rent payments, loan/hire purchase repayments, or child maintenance).

The next step is to estimate what you spend on everyday items (for example, food, clothes, petrol, pet food and newspapers).

Finally, include estimated amounts for unexpected and occasional costs (for example, Christmas and birthday presents, car and household repairs, dentist and optician bills, holidays and outings).

Work out the total outgoings for a full year and divide by 52 or 12 to get a figure for each week or month.

 

Income

Next list all of your income:

 

 

  • check your payslips to get an accurate figure for wages
  • look at statements for benefits, Child Tax Credit and similar income
  • include rent from lodgers or contributions from adult children

You should average out any irregular income and ignore one-off or uncertain amounts.

Work out your total income for a week or a month, then take away the expenditure to work out whether you have any spare money, or whether you’re over-committed.

 

If you have a shortfall

If your income falls short of your expenditure, you will have to prioritise your spending and cut back on commitments you can’t afford. Think about:

 

 

  • shopping around (especially for ongoing commitments such as gas, electric and telephone costs)
  • in the short-term, cutting everything down to the bare essentials
  • if you have debts, deal with them immediately

 

At the same time, it’s important to make sure you’re getting as much income as possible:

 

 

  • find out if you can get additional benefits or tax credits
  • make sure that everyone who lives with you and earns money is paying their share

 

When you start to have money to spare

Budgeting is all about making sure that you have money left over after paying all your bills. You may want to think about putting spare money into a savings account to pay for unexpected expenses, or towards a major expense (for example, a holiday or the deposit on a new car). If it’s a reasonably large amount, it’s a good idea to invest it so the money grows.

Shop around before choosing a savings or investment product to make sure you’re getting the best deal. You may also want to take professional advice before you make a decision.

 

Keeping track of your budget

A budget is only an estimate of what your income might be, and what you’re likely to spend. It’s important to keep track of your actual income and expenses to make sure your budget is accurate.

It’s a good idea to keep a notebook with you and, for the first couple of months, note everything you spend. You’ll be able to change your budget to make it more accurate, and you may get some ideas of where to save money. It’s also a good idea to review your budget on a regular basis, to take into account big changes in your circumstances (for example, a new job).

 

Where to get help and advice

Many organisations offer free help and advice on budgeting. It is important to ensure that any money management or debt help organisation is independent and is not funded by credit card companies or banks directly due to the conflict of interest that this brings about.

 

Myvesta UK

Organisations such as Myvesta UK and the governement FSA are a good starting point for personal financial advice.

More useful links

 

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Feb 10

Tips To Save Money


Posted: under Budgeting.
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Grocery Shopping

  • Plan your menu a week ahead and buy foods accordingly.
  • Always shop with a list so that you are not tempted to buy unnecessary items.
  • Visit supermarkets at the end of the day, when fresh food is often marked down in price.
  • Look for “own brand” items at supermarkets. They are usually cheaper.
  • When you get to the supermarket, immediately check out the ‘reduced item’ shelves (usually at the end of an aisle) to see if there is anything you could use.
  • Buying fresh vegetables from the local market or greengrocer usually works out cheaper than buying them from the supermarket.
  • Buy fruit and vegetables that are in season or even grow your own.
  • Fresh fruit and vegetables that need washing and cutting are much cheaper than prepared or frozen items.
  • If possible avoid prepared meals or other convenience foods as you are paying for someone else to prepare them.
  • Remember packed lunches work out much cheaper than buying sandwiches or eating out.
  • Watch the ‘sell by’ dates as you shop. You do not want to throw away food which you bought cheaply but cannot use in time.
  • Keep a running total as you shop and check against the till receipt – mistakes do occur.
  • Take advantage of all the money-off coupons you can.

Other Shopping

  • When buying larger items, don’t be afraid to ask for a discount.
  • Don’t be afraid to haggle (try to get a price reduced) – especially if you are paying cash.
  • Look for sales — they can be at any time of year (and are sometimes continuous). Christmas cards are very cheap in January!
  • Buying second-hand can be good value — but be sure things are in good working order, and won’t fall apart.
  • Buying cars two years old and keeping them for three years is the most economical way to own a car — but make sure you get the car thoroughly checked over before you buy.
  • Take advantage of discounts for buying in bulk – but only when you are sure you will be able to use the items. There is no point buying ‘3 for the price of 2’ if the product will be out of date before you can use it. Tinned goods and toiletries are ideal things to buy in bulk.
  • When you are thinking about buying something, don’t be afraid to walk out of the shop if you are not happy about the product, the shop or anything else.
  • Buy the items that do the job best: don’t pay just for the ‘right’ label.
  • Shop around for the best price. If you are thinking of using credit, remember to compare the APR as well as the prices.

Services

  • Get a written quote when having work done to your home or car.
  • Try DIY if you can (but don’t take unnecessary risks).
  • Don’t waste money on electricity and heating. Turn switches off when you’re not using lights and appliances.

Special Occasions

  • Many people don’t plan spending for things like Christmas and end up struggling. Putting aside an amount each month could help.
  • Can you make your own Christmas or birthday presents? This may sound a very old-fashioned idea but some of your older relatives might still like a gift you have made more than one you have bought.

Other Ideas

Below are just a few more ideas that can help your money go further.

  • Only pay with cash. This is easier said than done, but if you can’t afford something, save for it.
  • Walk or cycle to work whenever possible. This saves money, keeps you fitter and is better for the environment!
  • Remember that restaurants and fast-food places charge a high price for what you get.
  • Keep your budget up to date.
  • Keep looking for ways of making the most of your income and cutting down on your spending.
  • Keep a record of what you spend and check this against your bank statement.
  • Keep receipts and guarantees in case things go wrong.
  • Energizing

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Feb 07

Money Management Explained.


Posted: under uncategorized.
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We All Need Money Management Help From Time to Time….
Having a positive approach to your daily money management needs will enable you to better appreciate where you are financially and will help put you in a clearer position to achieve your financial goals in the short, medium and long term. Why is it then that so many people seem to live their lives in a financial muddle?

Managing your finances is rocket science!
The financial world that we live in is now very different to that of our parents and grand-parents. We have much less time in which to focus on the important task of daily money management and the number of financial and credit products that we have in our lives has more than trebled over the last 30 - 40 years. So, even though most people understand that they should pay more attention to their financial concerns the prospect of allocating the time needed to deal with credit cards, mortgages, mobile phones, insurance premiums and car payments etc can be an intimidating task.

Hence, for many people, after fighting the traffic to and from work, working hard all day, sometimes bringing work home too and juggling our career aspirations alongside our family and relationship commitments, there are not always enough hours in the day. Not surprisingly, a common casualty of our busy lifestyles is efficient money management.

Helping People Breathe More Easily
Helping busy people with everyday money management is why this website has been developed. As a free money management information centre, www.moneymanagement.org.uk helps people to get more out of life by translating the whole money management world and its terminology.

The range of money management products, services and information available via this website enable people to manage their financial lives by combining traditional ‘hands on’ money management help with more complicated money investment and management techniques.

Saving You Money
Efficient money management is more than simply paying your bills on time. That is why a key aspect successful money management plans is to regularly review and implement ways in which you can get better deals from providers and suppliers of household services. Here, you can examine the various money saving experts and service providers to ensure that you are getting the most suitable mortgage products, utility bills, credit cards, personal loans and other financial products that form part of a successful money management plan.

We hope that this free service is helpful to you and that you save money and create more personal wealth for yourself and your family in the future.

 

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