Living is set to get more expensive for most of us which is why it is important to get a handle on your finances.
The rise in the energy price cap in April, coupled with an increase to national insurance, and proposed increases to council tax, with ever-increasing food prices, means that paychecks are going to have to stretch further than before.
Asian Standard has enlisted the help of Kevin Pratt, a finance expert and editor of Forbes Advisor to give some useful tips and tricks on how to budget and save money for rainy days.
he said: “Rising energy bills, an increase in national insurance contributions and higher prices in the shops are putting the squeeze on our finances.
“With that in mind, we’ve put together this hand list of budgeting tips to help you make the most of your money.”
Get your finances down in writing
Whether you pen and paper or a flashy spreadsheet, find a way to record your income and your regular outgoings, from utility bills to groceries to clothes and other essentials. Once you have the figures in black and white, you’ll have a clear idea of your household budget.
Allow for the financial peaks and troughs
If you have irregular income, factor that into your budgeting calculations. Likewise, there will be some months when you spend more than others, whether that is on holidays, motoring expenses, school uniforms or celebrating birthdays and festivals. Make a note of those also.
Try to build a rainy day fund
When money is tight and bills are relentless, it can be hard to put anything by for a rainy day. But if it’s possible, try to build up a reserve in case something crops up such as a faulty boiler or essential work on the car.
Watch out for interest rate rises
The Bank of England raised interest rates in December 2021 to 0.25% and is expected to do so again in 2022 – perhaps as soon as next Thursday. If they go up, that could lead to more expensive mortgage payments, so check whether you are still on a competitive deal.
Make the most of your savings
If you have savings and debts, you’re probably paying more interest on what you owe than you are earning on your deposit. When this is the case, you should consider using some of your money to pay down your debt – but always keep a rainy day fund if possible for emergencies.
Use the right plastic card for spending
If you’re planning on a major purchase in 2022, use an interest-free purchase card and spread the cost for 20 months or longer without paying extra. Just make sure you clear the debt within that interest-free period.
Don’t just renew policies and contracts
When insurance policies and contracts such as TV and broadband deals come up for renewal, use a comparison site to check you’re on a good deal before automatically renewing with the same provider.
Ditch unnecessary direct debits
Go through your bank account and identify direct debits and standing orders you no longer need. Whether it’s the gym you never visit or the magazine you never read, those monthly costs will mount up over the course of a year.
Consider a budgeting app
There are plenty of budgeting apps in the online app stores. These allow you to set weekly or monthly budgets, break your spending down into categories and identify areas where you could make savings.