How To Successfully Live On A Budget

It may sound obvious but to successfully live within your means, the cash you spend each month needs to be less than, or at least equal to, the amount you bring in. For some people, this is a lot easier said than done. Credit cards, loans, and even emergency funds allow you to buy things you want when you want them, consequently it is easier than ever before to get into debt.

We all like to enjoy life outside of work and spend money in our free time, whether it’s going out to eat, having drinks with friends or watching the latest blockbuster movie at the cinema. But when money is tight, we have to be careful with the ways we entertain ourselves, to make sure we stick to a budget.

Here, we’ve put together a simple checklist to help you live successfully on a budget.

Create a budget that’s realistic

There is absolutely no point in having a budget you can’t manage – a good working budget needs to be realistic. When putting it together, you need to understand what, and where, you can cut down to save money. You must identify how you can allocate your income so that it meets your expenses.

It might be worth using an online budgeting tool, as these can help you keep everything under control and potentially save you even more money. It’s the perfect way to keep track of everything and see where you’re going wrong.

Steve Johnson

Reduce your car costs

Cars are expensive, there’s no escaping that, but there are numerous things you can do to lower the amount you spend on them. Such as, car sharing travelling to work with a colleague to cut down your petrol costs or adding a second driver to your car insurance policy as a named driver can lower your insurance costs, especially if they’re older and have a long history of no claims.

Until October 14, you can claim an MOT paid for by Halfords Autocentre when you purchase one thing in their store, above the price of a 5p bag. This can be redeemed any time in the year, making it one less thing to worry about and save you money.

Allow yourself to be flexible

Being flexible is one of the best ways to live comfortably and within a budget. We understand it’s not easy, but the simplest actions such as purchasing store brand products, instead of branded, makes a difference.

Prioritise

When you’re living on a budget you need to learn how to prioritise what is important to you. You may have to ditch going out for dinner every week and cook at home instead to save the pennies, as a family this would be a great time to get everyone together.  

In Collaboration with Debbie Fletcher

How To Audit Your Financial Life

Money can seem complicated. But in reality, it’s only ever as complicated as you make it. It may not feel like it, but you will always find that you can improve your situation, no matter what it looks like now. When you firmly believe that you’re stuck and that you’ll never get to where you’ll be, this is just something in your mind. So you need to shake that off, really get to grips with your situation and start to turn things around. The best way to do that is to be really objective with yourself. Even if, right now, your situation isn’t that bad, you can really make a change and improve things going forward. And if you have big dreams, then this is something that you’ll really want to do.

Cathryn Lavery
But what’s the best way to go about it? Because you know roughly where you are now, and you know where you want to be, but how do you make that leap? This is what the audit will help you with. It’s going to help you to break down your current situation and really figure out what changes you need to make in order to get to where you want to be. And there are always changes that can be made. So let’s see what they are.

 

  1. Set Some Goals

 

When it comes to doing anything in life, you need direction. So when you’re looking to make changes to your financial life, you need to have goals. So start out your financial audit by having a vision of what you want to achieve. Whether you want to buy your first home, launch a business, or just build up some firm savings, these goals are essential. Maybe you even want to transform your lifestyle? When this is the case, putting those goals in place is the first step for helping you to do it.

 

  1. Break Down Your Pros

 

The next step is to begin the audit of how you are right now. And to do this, you really have to be objective with yourself. You need to make sure that you can highlight the strengths that you have. Maybe you spend within your means? Maybe you’ve created a savings account? Maybe you earn well? Whatever it is, make sure you’re aware of any positive things about your current situation.

 

  1. Understand Your Cons

 

Next, we have the hardest part to do. Because you have to be able to understand your flaws and your weaknesses if you’re going to turn things around. And to do this, you have to be quite tough on yourself. Be honest and work what’s letting your current financial situation down. Maybe you’re in a lot of debt? Maybe you can’t control your spending? Maybe you earn pittance? No matter what it is, work it out, and own it.

 

  1. Budget Better

 

Now that you are more than aware of how you’re doing, it’s time to budget. By building a better budget, you will be able to take control of your earnings. You’ll find that you can start to really allocate your funds in the most cost-effective way. You’ll often reduce unnecessary payments that you make and start to get smarter with how you view your money.

 

  1. Spend Smarter

 

From here, you then need to be able to make your purchases count. Start by switching your bills to better deals. Use sites such as moneypug to find them. When you can save money on your bills, you’ve made the best start. Then, you’ll want to cut out expenses that you don’t need altogether. This is going to help you to free up cash for your financial goals.

 

  1. Home In On Your Earnings

 

When you’ve got a better grasp over your outgoings and you’re really starting to control them, you then need to do the same with your income. Ideally, you’re going to want to increase your earnings. The best way to do that is to work on getting a raise, go out for more work, or to even diversify your income by adding an automated stream.

 

  1. Keep Everything In Line

 

Finally, you then need to make sure that everything matches up going forward. The decisions you’re making with regard to your money have to link to your goals. Essentially, your actions have to match your ambitions. So be sure that everything you do, every time you spend, and your attitude towards your financial situation all mirrors those original goals that you set out.

Why it’s not impossible to buy your first home

For first time buyers, the prospect of saving a deposit for a first home can seem impossible. In the last few years, house prices have risen meaning that buyers need to raise thousands of pounds in order to secure a mortgage. For many people, this dream seems unreachable and young couples often make the decision to continue renting rather than spend years scrimping and saving for a mortgage. But, what if it wasn’t as impossible as it looks?

Make a plan

The first step in reaching any goal is to make a plan. Take a look at some of the houses you’re interested in and find out what kind of deposit they require. It’s also worth looking into the amount of deposit you’ll need to secure a mortgage. You can use as little as 5% to get a mortgage but it may mean you have to pay increased interest rates, so it’s better to aim for at least 10% if possible. This will give you an idea of how much you need save. The figure you come up with may seem impossible, but it’s important to consider your options before giving up entirely.

Rowan Heuvel
Help to buy

When it comes to raising a deposit for a mortgage, you may not have to do it all by yourself. After all, banks want your business, so it’s in their interest to provide you with as much help as possible. Help for first time home buyers can come in many forms. You may want to consider applying for a help to buy scheme, where a 20% deposit is put down for you. However, you do have to keep in mind that the deposit is repayable, and you may also have to pay interest if your home is sold for a greater price in the future.

Get paid to save

Saving money in your regular current account is just heading for failure. Unless you’re ridiculously strict on what you spend, it’s likely you’ll dip into your savings every now and then if you’ve got easy access to them. Putting your savings in a separate account is much safer. Take a look at the savings accounts that will give you the best return. You may have to deposit a minimum amount every month and you may not be able to make any withdrawals for certain period, but the amount you gain will be worth it.

An understanding family member

If you’ve got a family member with a bit of extra cash floating around and they’re willing to give it to you as a deposit that you eventually pay back, you’re in luck! However, many people haven’t got that amount to give but it doesn’t mean they can’t help. Take a look at the new 0% deposit mortgage offered by the Post Office. They will give you 90% of the house value and secure the other 10% by placing it against a family members home. The downside is, if you fail to repay your mortgage on time, both you and your family member are in trouble.

Difficult, yes. Impossible, no.

Collaboration