As the furlough scheme comes to an end, you may be facing a period of financial uncertainty. Whether your hours have been reduced or cut entirely, we’re here to help you manage your money during this difficult time.
Learning how to manage your money is a skill that can really pay off. Not only can money management help you stay on top of regular bills and expenses, but it can also help you start saving to pay for bigger things further down the road.
We’ve put together some simple tips on managing your money that can be applied to whatever wage you’re earning.
There are 6 easy ways to get on top of your finances. These are:
First things first: set aside some time to look at your weekly or monthly outgoings. Even if you feel like you’re not spending much on products or going out much, small things can add up. For instance, did you know that the average British person spends £303 a year on take away coffee?
Start with the big stuff and work your way down. Outgoings to keep track of include rent or mortgage payments, gas and electricity bills, council tax, and supermarket shops. You’ll also want to include repayments on loans, credit cards, or finance plans. Once you’ve ticked off all the big-ticket items, consider the smaller things.
The easiest way to find out how much you’re spending is to check your bank statements. If your new income isn’t going to cover everything, you should move to the next step: budgeting.
When making a budget it’s a good idea to sort your outgoings into three categories: needs, debts/savings, and wants.
Needs covers all essentials, such as mortgage/rent, council tax, bills, insurance payments and food.
Debts/savings covers savings contributions and any repayments that you may owe e.g. towards a loan or a credit card.
The wants category contains all non-essential payments. Right now, this might include temptations thanks to local restrictions such as takeaways, TV subscription services, and online shopping.
We appreciate it might not be easy for everyone but you could try to allocate 50% of your income for needs, 20% for debts/savings, and 30% for wants – but you should only start buying the non-essentials if you can cover the first two categories.
If you’re worried that your income won’t cover your budget, log in to Online Banking, take a look at all existing Direct Debits and ask yourself if they’re essential. Are you still signed up to a gym membership that you’re not using? Have you subscribed to one too many TV streaming services?
If you’re not using a service regularly enough for it to be worthwhile, then consider cancelling the Direct Debit. Just make sure you’ve checked the terms and conditions of your agreement, in case there are any penalties involved in leaving the contract early.
Saving isn’t particularly glamorous, but setting up a savings target, even if it’s small is a great way to get started. Once you have a goal, you could add some money to a savings account each month to reach it.
Don’t worry if the amount is small at first, every little bit helps, and as you get better at budgeting, you should be able to add more as time goes by.
If you have an account with us, our Mobile Banking App will help you keep track of payments on a daily basis. You can easily check how much you’re spending and find out where most of your money is going.
Being able to check your bank balance while you’re out is also a huge advantage when you’re trying to manage your finances. If you’re unsure if you can afford something, it’ll take you only a few moments to review how healthy your account is.
It’s no secret that energy providers are in constant competition with one another. So if you think you’re paying too much for your utilities, don’t be afraid to call up your providers and ask for your payments to be reduced. If they won’t budge, you could use a comparison site to find a better deal through their competitors.
In the summer months, your gas and electricity usage should naturally go down. If you don’t have a fixed price plan you can save some money by negotiating a lower rate over the seasons, and asking for a refund if you’ve overpaid, or switching to a new provider.
We’ve recently made some changes to help out customers who are struggling financially. To find out more, please visit our COVID-19 Community page.