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Tackling your debts

Budgeting ideas

Posted 03 October 2011

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A well-planned budget could make a big difference to your finances.

Over the past few years alone, many people's finances have felt the effects of rising bills, soaring living costs and 'squeezed' incomes. This being the case, making every penny stretch further can be a big priority for many.

One of the most successful ways of keeping track of your money and making sure all your costs are covered every month is creating a well-planned budget. Knowing exactly how much income you get and how it's all spent from month to month could give you a clear idea of how to keep your finances in good shape - and what changes you could possibly make to improve them.

Here are some helpful budgeting ideas that could make all the difference to the way you manage your money.

Prioritise your essential spending


When it comes to covering your monthly costs, it's important to make sure that all your essential expenses are comfortably covered - to increase your financial security and reduce the risk of falling into debt. Your 'priority' expenses are things like gas & electricity bills, food, rent/mortgage and anything else you regularly spend money on that your household needs. By making sure all your 'priority' costs are covered, you should be confident that you're never spending more money than you can afford to - which could make all the difference between staying on track with your money and facing debt problems in the future.

However, if you're repaying unsecured debts and struggling to afford your monthly repayments, you may need to find a debt solution - such as a Trust Deed - that could help you get back on top of your debts. It's important you speak to a professional debt adviser to discuss your options.

Keep track of all your outgoings


As winter approaches, many people see their monthly expenses rise: whether it's due to increased heating bills, the kids' school and university costs, or even covering the cost of Christmas.

Keeping on top of all the money that leaves your account every month could really help you spot spending 'patterns' and make any necessary changes that could help you cut costs.

Think about keeping a list of all your monthly spends, and/or registering for telephone/online banking, which could help you to keep an eye on your account via SMS messages/e-mail and other convenient ways of checking your balance 'on the go'. There are even some smartphone 'apps' that could help you manage your money via your mobile.

Boost your income


One way of making your budget that bit more comfortable is to maximise your income. It stands to reason that the more money you receive in your account every month, the more flexible you should be when it comes to spending/saving it.

You could think about:
• Selling any items you no longer use - such as old clothes, CDs/DVDs, games consoles, musical instruments - online or at car boot sales
• Asking your boss if there's any overtime available that could push up your monthly salary that bit more
• Finding out if you qualify for any benefits.

by Sarah Symons

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.