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How to budget on a low income

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When cash is tight it’s important to keep an eye on your budget. Careful organisation is required to avoid getting into debt and there are a few easy steps on how to budget on a low income and  keep your bank balance in the black.

Own your Budget

Watching the Chancellor deliver his budget every year can be enough to make the mind boggle. ‘Budgets are complicated!’ I hear you cry. Not so. A budget is basically an estimate of your Income vs

Expense over a given period of time. Forget the government – for ordinary folk like you and me, it is a simple sum of the money that you have coming in, minus what you spend. The aim is to make sure you don’t spend more than you earn. Simple.

There are many free online budget planners that can help you to organise your figures. Or if you prefer, sit down with a pencil and paper and get started that way. List out what you have coming in each week or month and add up all the figures. Remember to include:

• Earnings

• Any benefits

• Child Allowance

Tax Credits

Then list and add up all your essential outgoings for the same time period. Remember to include:

• Mortgage or rent payments

Utilities and other bills

• Mobile and TV subscriptions

• Food and clothing

• Vehicle and travel costs

Take away your outgoings from your income. Hopefully you will have some cash leftover – this is the income you have free to spend on things you choose, rather than on essentials. If the result of the sum is a negative number then you are possibly spending more than you have and need to make some savings – here’s how:

Tips for Cutting your Costs

How to budget on a low income• Shop Smart – use comparison websites to shop around for the best deals on everything you buy – you’ll be surprised how a few little savings here and there can add up. It will make you feel great too!

• Beware of Special Offers – they are not always as great as they seem – shop around, and avoid being tempted to buy more than you need – 2 for 1 offers are only great if your don’t end up throwing one away

Use Vouchers and Coupons – this may mean switching from your usual brand, but can save you £££

• Get Cashback from Shopping Online – cashback sites pay you a small amount if you access a website via theirs. For the sake of an extra click you can soon rack up a tidy amount for nothing

• Reduce your Travel Costs – use the supermarket money off vouchers when filling up, or take a minute to look online for the cheapest petrol prices in your area

• Drive Carefully – it’s perfectly possible to save up to a third on your petrol costs if you drive like a saint – correct tyre pressure, drive in the right gear, don’t over-rev, switch off the air-con, keep your speed average, empty your boot of heavy things (but not the jack!)

• Ditch your car altogether – if you only drive occasionally then sell your car and join a car club where you can rent a car when you need it for much less than standard rental fees. Plus you save on all those annual costs of owning a car, such as servicing, tyres, insurance, tax and repairs

• Use Public Transport or buy a Bike

• Search out Holiday Bargains – booking last minute, or haggling with your high street travel agent can save you money, and shopping around for travel insurance, foreign exchange rates and international mobile telephone deals can all help to keep the cost of a break at a more palatable level

• Check out the Benefits you can claim – interest free loans can be made available to those on low incomes to help them through challenging financial times – be wary of other types of loan for which the repayments can be crippling.

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About Cally Worden

About Cally Worden

Seasoned freelance writer Cally Worden lives with her family and dog in a quiet corner of rural France. A love of the outdoors, and a fascination with her children's ability to view life with fresh eyes provide the inspiration for much of her work. Cally writes regularly for various websites and UK print publications on subjects as diverse as parenting, travel, lifestyle, and business, and anything that makes her smile.

Website: Cally Worden

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