Coins spilling from a glass jar

Comings and (Out) Goings

Budgeting sounds like a headache but all we’re doing is making sure more is coming in than going out. Breaking things down into bite-size chunks can help.

Readers at our money events frequently tell us how hard it can seem to check our finances are in balance. So, to get started, Quids in! has simplified the process with three basic questions. Asking them helps us find ways to stretch our budget just about as far as it will go.

Question 1: Do you know exactly how much money goes out each month and how much your monthly rent (or mortgage) payments are?

When every penny counts, we have to count every penny. Some of what goes out is the same each month, so we only need to worry about what’s left. As a rough guide look at the
past three months’ statements and list the regular stuff: Rent, mortgage, bills (on average), and so on.

Start with the big ones and work down. There are online calculators to help, (like this one from the Money Advice Service). Once you include your average monthly income too, you’ll see how close you are to any possible trouble, especially if more is going out than coming in. Now, you can plan properly.

Many of us forget that if Housing Benefit is paid direct to our landlord but it is income. We just don’t see it. On Universal Credit, we will, so it’s important to know how much it is we’re due to receive and then pay. When budgeting, include rent even if it’s paid direct to the landlord – add it to your income as well as your costs.

Ask for help if you need. Your landlord, if you rent from the council or a housing association, may offer support or would know who does. If you’re a claimant, ask at the Job Centre. Or there’s always Citizens Advice or a debt charity, if you feel you’re sinking. (See Useful Links)

Top Tip: Use an online budgeting tool. Any expenses you don’t know, find out. If a lot is going out in cash, make sure there is a record of where it’s gone. Use a notebook as a spending diary and write down what you bought, what it cost and when you bought it.

Do The Payday Stretch

Question 2: Do you feel certain your money will last until you next get paid?

It’s pretty depressing when we don’t have the money to do all we want in the last few days before payday. Worse, if we don’t stop when we run out of cash… that way debt crisis lies.

We have to know how much is coming in and how much is going out each month to be sure it’s going to last. There are online calculators to help us see why we end up short. If we are, we have to plan what we’ll do to top up our income or pull back on some of our spending.

If we still can’t make ends meet, we need help. There’s quite a bit on offer and it should be free. Never go to a debt company or you’ll end up paying them too. Our Useful Links page has a list of contacts.

Using direct debits gives us peace of mind that the bills we can’t avoid are covered. It’s best to organise them for a short while after pay day, so we know the money will be there. We should circle the dates when direct debit payments go out of our account. We don’t want to slip into overdraft or have the payment refused, which could both trigger charges.

If it’s going to be tight staying in the black until next payday, look through the budget and see what can be cut. But also remember there are often ways to bring in a bit more too. Do a benefit check, as welfare is there to help us when we’re struggling. See if there is anything to sell online or at a car boot sale or if there’s a few hours work available somewhere. (See the Quids in! Boost Your Income section for ideas.)

Top Tip: Compare your income to your outgoings. If it’s tight, look through the list and see what can be changed. Make the changes, don’t put it off.

Beat The Birthday Blues

Question 3: Do you plan ahead money-wise for holidays, birthdays and Christmas/ religious holidays?

Annual expenses can hit us in the wallet even though we go through the same pain every year. Thousands of people get into Christmas debt, for example, when it would cause far
fewer grey hairs if we just knuckled down and saved up in advance.

List all the annual things that bite us in the bum and work out in advance what budget we’re going to give each one. Now divide by 52 if we’re going to save weekly, or 12 for monthly, and get started. It might be best to keep a separate savings pot for each one, or use a savings account and save it all together.

Even the best budgeters can forget the yearly outgoings, so it pays to plan ahead.

Top Tip: Write down all you spend on annual ‘one-offs’. Add them up and plan how to cover them, eg, by saving up. Then start saving.

For more on budgeting, check out the pages here.

The ideas here are drawn from the Quids in! Future-Proof Your Finances Test. This online tool checks we’re on top of our money and will be able to keep it that way. Take the Test here and see what else you might do.

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