Living on a budget
Why budget?
- A budget is a way to help you organise your spending and tells you what money you have coming in (income) and going out (expenditure).
- A budget can help to prevent you from getting into debt.
- A budget can help you put money aside for things you want.
Planning a budget
When you’re planning a budget you will need to know two key pieces of information:
Income – what money do you have coming in?
Expenditure – what money do you have going out?
Identifying different types of income
- Some income is regular for example: wages from employment or benefit payments
- Some income is not always steady or available for example: income from self-employment, car boot sale, or one off payments
Tips for living on a budget
- Shop around – when your utilities/insurance etc. are up for renewal use a comparison site to find the best deal that most suits you.
- Make a weekly meal planner before you do your shopping.
- Plan a weekly budget.
- Make extra and freeze to use on another day.
- Supermarkets use various strategies to make you buy more. For example supermarkets’ layout is arranged in a way that ‘invite’ you to buy more than you need.
What is expediture?
To plan an effective budget, you must be able to balance needs and wants and be able to prioritise within the constraints of your resources
To be able to do this you must be able to understand what you are spending and what the consequences are if you stop paying for something, you can then identify essential expenditure
To get the best deal on utilities:
- Use comparison websites to search for best deals
- You will get a discount if you are able to pay by direct debit
- You usually get a better deal if you get both gas and electricity from the same supplier
- Fixed tariffs could be higher but if prices rise your tariff will stay the same
