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Managing your money

Being short on money each month can feel unsettling. But there are ways to meet your needs and stay out of debt. Use this helpful guide to learn about setting up and sticking to budgets to stay in control of your money.

illustration of person looking at a cash machine

Budgeting basics

Get to grips with all things budgeting and stay on top of your finances. Learn how to set and stick to a budget to strike a healthy balance between spending and saving.

Budgeting is a financial plan that you set up to help prioritise spending. By sticking to a budget, you can ensure you have enough for life’s essentials whilst also saving for the nice-to-haves.

Overspending can creep up on you. Try to look out for these signs and start on a budget sooner rather than later:

  • You’re struggling to pay bills, and avoiding the most important ones
  • Your credit cards are always maxed out
  • You’re spending when you know you shouldn’t
  • Money feels like a constant worry

Budgeting is fairly simple. Compare what you’d like to spend over a particular period with your monthly income. If those outgoings are more than your income, you’ll need to decide what to cut back on. If you have more money coming in than you spend, think about saving for a rainy day.

By getting into a routine you can quickly work out unnecessary spending, and opportunities to save.

Learning about and sticking to a budget is a good way to stay financially healthy. It allows you to:

  • Identify your spending habits so you can make changes
  • Spend on short-term necessities and save for longer-term niceties
  • Be prepared for unplanned costs like job loss or sick leave
  • Make smarter choices now to help you in the future

39% of adults don't feel confident managing their money

– Financial Capability Survey

Steps to stay ahead

Follow the steps below to help better manage your day-to-day and ongoing finances.

Set a timeframe and track all your spending honestly, grouping spending types into categories to help prioritise important things. Then try to control your spending with these smart steps:

  • Track small costs so they don’t add up over time
  • Prioritise needs over wants, cutting out little extras
  • Review regular bills and switch to a cheaper provider if possible
  • Set up a separate bank account with a direct debit for monthly bills

Starting a budget can take time, but it’s worth it. Jot down your essential needs and must-haves to help make sure you have enough money for the important things. Anything left over can be saved for treats or unexpected costs.

Then get started with our helpful budget planner. Gather your financial information, like payslips and bank statements, and set aside 30 minutes to complete it.

And remember, budgets can always be updated if your situation changes.

Check if your employer offers any budgeting support to ease the impact of money worries on your wellbeing. This may include:

  • Season ticket loans
  • Saving schemes
  • Financial resilience support, which may be available via your intranet
  • An Employee Assistance Programme (EAP) for specialist advice

Planning is a powerful budgeting tool. Follow these steps to help make sure you can afford to spend on life’s bigger moments:

  • Write down big upcoming expenses to avoid panic buying and potential higher costs
    Set up price alerts and use online price comparison sites for the best deals
  • If you’re on a low income and qualify for benefits, ask your local authority about a budgeting loan for things like furniture. Just make sure you’ll be able to afford the repayments first
  • Plan ahead to save money on days out. Make a picnic or look for deals on daytime attractions. Money Saving Expert has some great ideas

Make small changes to help reduce your energy costs, with MoneyHelper’s tips for renters and owners.

Stay healthy on your plates and in your pocket by reducing your weekly shop costs with these smart tips:

  • Plan ahead with a list and try to stick to it
  • Avoid shopping when you’re hungry
  • Bulk out any meat dishes with more vegetables or pulses
  • Stock up on more affordable frozen fruit and vegetables
  • Keep an eye out for vouchers and sale items
  • Choose store brands instead of big names. They usually taste the same!
  • Try fruit or yoghurts as a cheaper alternative to prepackaged snacks

Focus on priority debts like rent, mortgage or bills to avoid penalties or legal action. And don’t take on any more debt while you’re figuring things out – it’ll only make things worse.

Speak to your lender about a payment break to help with any income gaps or debt. You may also be able to extend the payment period for your Council Tax, water bills and TV licence fees to 12 months instead of the standard 10. Mortgage providers may offer a temporary payment holiday or loan extension, meaning smaller payments over a longer time.

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