Sometimes it can be a challenge to make your money last from one payday to the next. It only takes one unexpected expense, like a breakdown or a household emergency to throw your budget off track and leave you reaching for credit cards or even worse payday loans.
Here are some money tips and ideas you can use to stretch your budget from month to month without allowing your finances to get out of control.
1.Set a daily budget
A great money tip to start with is getting organised. Calculate what is left after priority payments such as your mortgage, energy, travel and phone bills, but also any other regular payments, such as Netflix or gym membership, then divide this amount by the number of days until your next payday. This will help create a daily budget or spending limit. In practice, there will be some days when you can spend less than this budget, and some days when you need to go over, but the discipline and focus will be beneficial.
Some of the newer online banks such as Loot and Starling can help you with budgeting as you can set a daily spending cap on your card and receive instant notifications on your smartphone when you have spent something.
Write a list of all the things you anticipate you may need to pay for in the coming month over and above your usual spending. This could include things like birthday gifts, car services, haircuts, meals out. It helps you get ahead of the game and anticipate any additional spending.
3.Save an emergency fund
It is estimated that homeowners need 1 per cent of their home value (£2,158 for a typical home) saved up each year for repair work and maintenance. You should also expect to fork out for the odd broken big ticket item in a year. Consistently putting aside any surplus funds into an account purely for emergencies will help you avoid having to take out finance or buy large items on credit.
4.Hunt for the cheapest petrol
Cars can be a significant outgoing. If you need to fill up, Petrolprices.com is a website that finds the cheapest fuel near your postcode. If you really don’t have the cash for a full tank, would taking the bus, cycling or walking save you a bit of cash for a few days?
5.Sell stuff you don’t want
If you are half way through the month and things are looking bleak, consider whether there is anything you can sell on eBay or Gumtree. eBay reckons the average household has £4,000 worth of unwanted good lying around. There’s also the added bonus of decluttering your home!
6.Have you overpaid on your energy bills?
Millions of people pay a fixed monthly amount for their gas and electricity. Often, this can result in running up a surplus of hundreds of pounds over a year. Check your last statement to see if you are in credit and if you are, contact your supplier to ask for some of this money back. This is usually a one off however so you can’t rely on this tactic every month!
7.Amend payment dates
If you regularly end up in your overdraft, paying hefty interest charges at the end of each month, it might be a good idea to bring some of your biggest direct debits to the end of the month (just before your next payday) rather than the beginning (just after your payday). This will mean your account is better funded throughout the month, reducing any interest charges you will have to pay as well as the risk of incurring any unauthorised overdraft fees. Take care though, the danger with this approach is that if you overspend during the month, you won’t have enough left to cover your big bills, such as your mortgage, by the end. Careful budgeting is important if you try this method of managing your interest and charges.
Don’t let unexpected expenses throw your budget off track. Take back control of your money with these seven smart money tips to help you get from one payday to the next without resorting to high cost payday loans.